ICE Canola Futures Weaken As More Canola Found
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| December 3, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly lower price levels at 9:33 EST. Much of the early weakness in canola was associated with the crop production update from Statistics Canada that revealed higher than anticipated supplies of the commodity.
The government agency pegged 2010/11 (Aug/Jul) canola production in Canada at 11.866 million metric tons, which was above the October projection of 10.430 million and surpassed pre-report expectations that ranged from 10.40 million to 11.50 million tons. In 2009/10, Canada’s canola output totalled 12.417 million tons. "Some individuals were only expecting a jump in output of about 200,000 tons….the increase was closer to 1.5 million, creating some room for selling pressure," a broker said. The continued strength in the value of the Canadian dollar was also an undermining price influence in canola, with the currency continuing to push towards parity with the US dollar, traders said. The absence of fresh export demand was adding to the bearish price atmosphere. The downward price pressure in canola was stalled by the gains seen overnight in e-CBOT soybean futures, Malaysian palm oil, and European rapeseed values, brokers said. Dryness concerns in the soybean growing regions of Brazil and Argentina were also helping to generate a firm price floor for canola. Steady domestic processor demand amid favourable crush margins were also providing good support under the market. The slightly higher calls for CBOT soybean and soyoil values with the start of the North American day session were also seen generating some support for canola, brokers said. As of 9:33 EST, there were 2,777 canola contracts traded. As of 9:33 EST, no western barley contracts had been traded.
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