ICE canola lifted by good commercial buying interest
Alana Vannahme, Resource News International
Winnipeg, April 1, 2009 –– Canola futures on the ICE Futures Canada platform were trading at mainly stronger levels as of 11:10 CDT on Wednesday. Buying interest was helping to lift canola prices despite the mixed tone in outside markets.
In the last two sessions, canola futures have lagged behind the US soy complex, a Winnipeg trader noted. As a result, canola is now very attractively priced and that is encouraging good commercial demand, he said.
The soft tone of the Canadian dollar and gains in global equities were also lending support to canola contracts, traders said.
The market’s upside was being capped, however, by declines in CBOT soyoil futures and the mixed tone in CBOT soybeans on Wednesday, brokers said.
Further adding to the bearish pressure on canola contracts was the absence of follow-through buying in CBOT soybeans following Tuesday’s sharp gains, market watchers said. ‘Missing’ acres in Tuesday’s USDA planting report are causing concern that yesterday’s bullish soybean acreage estimate was not very indicative of what spring planting will actually be.
Also, the Argentine Agricultural Secretariat retracted the soybean production estimate that it released on Tuesday, saying it contained errors. They are now expected by the trade to upwardly revise their forecast, raising their initial estimate of 37-39 million tonnes to 41-43 million tonnes.
The drop in crude oil futures below US$48 dollars a barrel was also tempering canola’s price advances.
As of 11:10 CDT, 13,751 canola contracts had changed hands. Of that amount, 10,730 trades were tied to spreading.
In the western barley market, prices were higher although activity was very light. Only 46 contracts had been traded as of 11:10 CDT and 44 were spread-related.
Prices in Canadian dollars per metric ton at 11:10 CDT:
Price Change
Canola
May 424.00 up 3.60
Jul 429.00 up 4.20
Nov 433.00 up 1.90
Western Barley
May 150.90 up 8.70
Jul 149.00 unch
