By Phil Franz-Warkentin, Commodity News Service Canada
Jan. 8, 2013
Winnipeg – ICE Canada canola futures traded to both sides of unchanged Tuesday morning, although the bias was to the downside in most months as the market saw some consolidation after Monday’s rally.
A slightly firmer tone in CBOT soybeans did lend some underlying support to canola, according to participants. European rapeseed futures were also higher in overnight activity.
However, other outside markets, including Malaysian palm oil and CBOT soyoil, were on the weaker side, which accounted for the mixed tone in canola.
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A lack of follow-through buying on Monday’s rally was seen as bearish from a technical standpoint, according to an analyst. The firm Canadian dollar and continued expectations for large South American soybean crops were also overhanging the market.
On the other side, solid end-user demand, as evidenced by the good basis levels currently available in western Canada, provided some support for canola. Concerns over tightening supplies and the need to ration demand were also somewhat supportive.
The USDA releases updated supply/demand estimates on Friday, January 11, and traders remained cautious that positioning ahead of the reports could lead to some choppy activity in the grains and oilseeds over the next few days.
About 1,300 canola contracts had traded as of 8:45 CST.
Milling wheat, durum, and barley futures were all untraded and unchanged Tuesday morning.
Prices in Canadian dollars per metric ton at 8:45 CST:
