ICE Canola Holding Onto Modest Gains

By Phil Franz-Warkentin, Resource News International

April 22, 2009

Winnipeg – Canola futures on the ICE Canada platform were higher at 10:48 CDT Wednesday, in choppy trade. A firmer tone in old crop CBOT soybeans and soyoil provided some support, according to traders.

A Winnipeg-based broker described the activity in canola as quiet and lacking in any real direction. He noted the outside equity, energy, and currency markets that usually help drive the canola market, were not showing any clear signals themselves on Wednesday.

The broker thought commercial demand was accounting for most of the buying in canola, as the commodity is still relatively cheap compared to other options.

However, he didn’t think there was much speculative interest in the market, which kept prices from pushing much higher.

Light hedges also limited the upside in canola, although farmers are starting to move to the sidelines ahead of spring seeding.

Some positioning ahead of Statistics Canada’s planting intentions report, to be released April 24, was likely a factor in the day’s trade. Average market sentiments are for a slight increase in canola acres from the 16.159 million seeded in 2008/09, with a range from 16.0 million to 17.0 million.

As of 10:48 CDT, 3,800 canola contracts had changed hands, with inter-month spreading a moderate feature as participants continue to exit the nearby month.

Western barley futures were unchanged as of 10:48 CDT, with no contracts actually traded.

Prices in Canadian dollars per metric ton at 10:48 CDT:

Price Change
Canola
May 441.70 up 1.80
Jul 444.30 up 1.90
Nov 444.60 up 0.70

Western Barley
May 131.50 unch
Jul 139.00 unch