ICE Canola Remains on Defensive, Spreading the Feature
| 1 min read
| By Dwayne Klassen, Resource News International |
| February 18, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly lower price levels at midday with the relative firmness of the Canadian dollar, the absence of fresh export demand and the large supply of canola on farm in Western Canada tied to the bearishness, market watchers said.
Good volumes were again being seen in canola, with the rolling of positions by commodity funds out of the nearby March future and into the May contract a key feature of the activity, brokers said. Canola futures had eased in overnight activity with light carryover selling and the weakness seen in Malaysian palm oil futures putting downward pressure on values, brokers said. Light elevator company hedge selling was also evident and helped to depress canola futures early. Canola futures had turned mainly higher for a brief period of time when the North American trading day got underway and CBOT soybeans and soyoil futures had posted advances, traders said. Some light bouts of short-covering also surfaced temporarily bolstering canola. However, when the buying dried up, canola values easily moved back to lower ground, brokers said. Adding to the bearish backdrop in canola was the large global oilseed supply situation, particularly with Brazil and Argentina set to harvest extremely large soybean crops. There were an estimated 7,309 canola contracts traded at 10:27 CST. Of the contracts traded, the bulk were said to have been spreads. There were 12 western barley futures traded as of 10:27 CST. Commercial liquidation of positions in the absence of willing buyers accounted for the downward price slide seen in the nearby March and May contracts, brokers said. |
