ICE Canola Futures Firm On Demand, Weak C$
| 2 min read
| By Dwayne Klassen, Resource News International |
| May 21, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly higher levels at 9:37 EDT. Firmness in canola was associated with steady demand from the export and domestic sectors tied in part to the continued downswing in the value of the Canadian dollar, market watchers said.
The weak currency has stimulated fresh domestic processor demand with commercials also stepping up to price old business to Japan, brokers said. The buying back of previously sold positions helped to generate some minor support for canola as did the advances seen overnight in Malaysian palm oil. Activity was expected to be extremely choppy ahead of the long holiday weekend in Canada. ICE Futures Canada will be closed on Monday, May 24 in observance of the Victoria Day holiday. Speculative participants will likely be concerned about holding positions of any kind given the macro-market uncertainties that exist. The upside in canola will continue to be limited by the generally favourable weather which has been beneficial for the planting of the record sized canola crop in western Canada and the development of those fields. Weather outlooks calling for rain during the holiday weekend across the Canadian prairies was seen as an undermining price influence and will be welcomed in a number of areas, brokers said. Adding to the bearish sentiment in canola will be a pick up in farmer deliveries and news that Australia’s canola crop will be increasing significantly in size, traders said. The Australian Oilseeds Federation has forecast canola production this year will rise 19% to 2.27 million metric tons from 1.90 million the previous year. The new forecast, if achieved, would be their biggest Australian canola crop in 10 years, analysts said. As of 9:37 am EDT, there were 874 canola contracts traded. As of 9:37 am EDT, no western barley contracts had been traded |
