ICE Canola Finishes Lower On Pre-Weekend Liquidation Orders

By Dwayne Klassen, Commodity News Service Canada


Winnipeg – November 16/12 – Canola futures on the ICE Canada trading platform ended Friday’s session on the defensive with the liquidation of positions ahead of the weekend behind some of the downward price action, market watchers said.


Some of the liquidation was linked to bearish chart signals, but also consisted of investors unloading risk ahead of the weekend, brokers said.


Selling was also spurred on by the decline experienced in CBOT soybean and soyoil futures. Late day hedge selling by elevator companies, tied to the possibility of increased farmer deliveries of canola during the weekend, further weighed on prices, brokers said.


The favourable weather for the development of soybean crops in Brazil and Argentina also added to the bearish sentiment in canola, traders said.


The losses in canola were tempered by scale down commercial buying, said to be covering old export business to Japan. Domestic crushers were also light buyers, but demand from the processors has declined amid the deterioration in profit-margins.


The small downswing in the value of the Canadian dollar during the session also provided some minor support. The buying back of previously sold positions and sentiment that canola futures were oversold also helped to restrict the price declines, brokers said.


There were an estimated 13,272 canola contracts traded Friday, up fractionally from the 13,072 contracts that changed hands during the previous session. Of the contracts that changed hands, 7,806 were spread related.


Milling wheat futures were lowered at the close by ICE Canada with no trades occurring.


Barley and durum contracts were untraded and unchanged.


Prices are in Canadian dollars per metric ton.

Commodity futures

Futures Prices as of October 22, 2014

Canola Price Change
January575.704.80
March573.305.20
May571.605.30
Milling Wheat Price Change
December303.503.50
March313.003.50
Durum Price Change
December312.40
March319.00
New Barley Price Change
December250.00
March253.00

Prices are in Canadian dollars per metric ton