ICE Canola Strengthens On Fresh Demand Ideas
| 1 min read
| By Dwayne Klassen, Resource News International |
| February 3, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at slightly firmer price levels at midday with some of the price strength associated with talk of fresh demand surfacing, market watchers said. Spreading was a dominant feature of the activity.
Canola had found support overnight from the advances exhibited by Malaysian palm oil and European rapeseed futures, traders said. Sentiment that canola continued to be oversold and was in need of a further upward correction also underpinned values. Weakness in the Canadian dollar was viewed as an minor supportive influence for canola with the refusal of producers to deliver canola into the western Canadian grain elevator system also generating some strength. Routine exporter pricing of old business was friendly for canola as was talk of some fresh sales being uncovered, traders said. Confirmation of fresh canola sales, however, was lacking. The upside in canola continued to be restricted by the downward price action seen in CBOT soybean and soyoil futures. The large Canadian canola supply situation combined with the ample world soybean stocks also tempered the upside price potential, brokers said. Bearish chart signals were also seen as an undermining price influence. Much of the activity in canola was said to be spread related, with large index funds rolling out of the March canola contract and into the May future, traders said. There were an estimated 9,920 canola contracts traded at 10:24 CST. Of the contracts traded, 9,038 were spread related. There were 30 western barley futures traded as of 10:24 CST. Light commercial demand, in the absence of willing sellers, generated the support that took the two nearby western barley contracts up, brokers said. |
