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ICE Canola Lower On Weak US Soy, Crude Oil

| 2 min read

By Don Bousquet

By Don Bousquet, Resource News International

Aug 14, 2009

Winnipeg – RNI- – Grain and Oilseed futures contracts traded on ICE Futures Canada at 11:18 CDT Friday were moderately lower in the wake of steep declines in Chicago Board of Trade soybean markets and big losses in crude oil, brokers said.

Canola saw a very light trade with an estimated 4,025 contracts changing hands as of 11:18 CDT.

Canola was sharply lower at midday as the steep declines in CBOT soy complex sent canola prices down. The weak tone in crude oil also contributed to the price slide.

Farmer selling has increased as producers in Manitoba and Saskatchewan are more positive about getting a crop this year.
Weather conditions in the two provinces are favourable.

Technical signals turned bearish following yesterday’s market performance and that weighed on values as well.

Underpinning the market were reports of frost in the Peace River district of Alberta. However, traders noted that it did not get cold enough for long enough to cause significant damage. "It dropped fractionally below 0 (degrees Celsius) for less than 2 hours…so any (crop) damage would be minimal," said a trader.

However, forecasts continue to call for single digit lows in Alberta on the weekend and that generated some support.

Continued steady commercial demand also gave support. One trader noted that except for month-end liquidation on July 31st, open interest has increased everyday for the past month.
He noted that someone wants to own canola.
"I certainly wouldn’t want to be short with crop problems this year," he added.

Also supportive for the market was a weak Canadian dollar.

Routine exporter buying was augmented by some speculative buying, although traders were unsure if it was short covering or going long.
"It doesn’t make sense but there is spec buying here," said a trader. The selling was mainly commercial with elevator company and exporter offerings noted.

Western barley was untraded and unchanged.

Prices at 11:17 CDT in Canadian dollars per metric ton:

    Price Change
Canola
  Nov 434.90 dn 5.10
  Jan 439.30 dn 5.70
  Mar 442.00 dn 6.40
 
Western Barley
  Oct 144.90 unch
  Nov 165.00 unch