ICE Canola Futures Higher on Tight Nearby Supplies
| 2 min read
| By Dwayne Klassen, Resource News International |
| June 19, 2009 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at higher price levels as of 9:50 EDT. Some of the upward price action in canola reflected the tight nearby supply situation of canola, market watchers said.
Strength in the outside markets also influenced some of the buying interest in canola. Canola continues to find support from the lack of farmer deliveries into the cash pipeline. Traders are indicating that just over 500,000 metric tons of canola is needed to service Canada’s West Coast export commitments in the next 30 days. Producers in western Canada remain reluctant sellers of old crop canola given concerns about new crop supplies due to the adverse weather conditions impacting development, traders said. Gains in global crude oil futures and firmness in the North American equity sector early Friday were also seen as mildly supportive for canola contracts, brokers said. The advances in the nearby canola contracts also came in anticipation of CBOT soybean futures pushing upwards with the start of the North American day session. Light domestic crusher demand was also seen as supportive. The upside in canola will be limited by the losses overnight in Malaysian palm oil futures and the absence of fresh export business being put on the books. The Canadian dollar was little changed in early Friday morning activity. A quiet news front is expected to keep attention on outside market movements, as traders await fresh news to provide leadership for futures, analysts said. Without fresh news, traders are expected to take a cautious approach heading toward the weekend and next week’s acreage survey update from Statistics Canada. The USDA will also release key acreage and stocks reports on June 30. As of 9:50 am EDT, there were only 60 canola contracts traded. At 9:50 am EDT, no western barley contracts had traded with prices unchanged.
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