ICE Canola Futures Drop On Outside Oilseed Declines
| 2 min read
| By Dwayne Klassen, Resource News International |
| October 28, 2009 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly lower price levels at 9:40 EDT. Losses in canola reflected the sell-off experienced by the outside oilseed markets overnight with good soybean planting weather in South America adding to the bearish price sentiment, market watchers said.
The e-CBOT soybean complex pushed lower overnight with declines also posted in Malaysian palm oil and European rapeseed futures, brokers said. Weakness in the equity and energy markets overnight were also considered undermining price influences for canola. Some of the selling seen in canola also came in anticipation of a lower opening for CBOT soybean and soyoil futures with the start of the North American day session. Technically, the MACD indicators on all oilseed charts have turned lower and that is a significant red flag warning that lower prices are on the way, traders said. Helping to undermine canola futures was the lingering uncertainty surrounding canola exports to China. Canadian and Chinese government officials are meeting this week in an effort to maintain normal canola trade between the two countries. Last week, China informed the Canadian Food Inspection Agency, or CFIA, that it would have to certify that canola loaded after November 15 is blackleg-free. Since that is an impossible request, the CFIA is looking for at least a temporary solution. Canola Council of Canada spokeswoman Debbie Belanger says the CFIA is going to immediately request a minimum 6-month extension to deal with the issue and provide China with additional information. Some underlying support in canola was coming from sentiment that values are underpriced in comparison to other oilseeds, brokers said. Wet weather forecasts for western Canada which will prevent producers from finishing off the canola harvest were also providing some underlying support. Weather forecasters are calling for wet and snowy conditions into next week in much of Western Canada. Traditionally, winter sets into the Canadian Prairies in early November. As much as 20% of the canola crop is felt to be unharvested. Weakness in the Canadian dollar early Wednesday was also considered supportive for canola values, brokers said. As of 9:40 am EDT, there were 1,850 canola contracts traded. As of 9:40 am EDT, no western barley contracts had been traded.
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