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ICE Canola Lower On Ideas Gains Overdone

| 2 min read

By Don Bousquet

By Don Bousquet, Resource News International

Aug 12, 2009

Winnipeg – Grain and Oilseed futures contracts traded on ICE Futures Canada were lower at 08:47 CDT Wednesday as weakness in palm oil values and ideas that Tuesday’s big gains were overdone weighed on the market, brokers said.

Canola saw moderate trade as an estimated 2,053 contracts had traded by 08:48 CDT.

Canola was down in the overnight session on a weaker tone in international vegetable oil markets and ideas that Tuesday’s rally was overdone. Canola did work its way back from lows and received some small support from this morning’s USDA supply-demand report which was friendly for soybeans, traders said.

Canola is expected to continue to see losses as the North American trading session gets underway despite expected gains in the Chicago Board of Trade soy complex, traders said.
"Yesterday’s gains were simply overdone", said a trader, " and we’ve got to give some of them back today". However, traders also indicated if the CBOT soy complex rally, on the bullish USDA report,
is stronger than expected it will pull canola higher.

The forecast for frost on Thursday of next week is generally being treated with skepticism.
However the slow pace to farmer selling and the definite canola crop problems are giving some support to the market and limiting the weakness, said brokers.

Technically, traders are quite friendly to the market noting that the outlook is bullish with C$460 in the Nov contract the next level likely to be tested.

Commercials and speculators have been buyers this morning, said traders. The selling is coming from some profit taking and commercial offerings.

Western barley is untraded and unchanged and is expected to work lower on the expected weakness in CBOT corn markets and ideas that feed supplies will be large in western Canada due to the poor growing season.

Prices at 08:46 CDT in Canadian dollars per metric ton:

    Price Change
Canola
  Nov 445.00 dn 1.70
  Jan 450.90 dn 0.20
  Mar 449.80 dn 4.90
 
Western Barley
  Oct 139.70 unch
  Nov 161.70 unch