ICE Canola Ends Mostly Higher, Commercials Lift Values

By Dwayne Klassen, Commodity News Service Canada

May 27, 2013

Winnipeg – Canola futures on the ICE Canada trading platform finished Monday’s session on a mainly firmer footing with only July experiencing any movement to the downside during the day. Activity in canola was described as light and choppy with a number of participants taking to the sidelines due to the closure of the US markets for the Memorial Day holiday.

A lot of the price action seen in canola was concentrated in the two nearby months, with the unwinding of spreads by commodity funds providing much of that movement. The funds were said to be unloading July positions in favour of either the nearby November or January contracts, traders said. That action weighed on July and supported November.

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Support in canola also continued to come from the absence of farmer deliveries, with spring seeding operations the key focus of those individuals at this time, brokers said.

Light commercial demand, said to be pricing routine export business and some minor domestic processor needs, helped to underpin the deferred canola values.

Sentiment that CBOT soybean and soyoil futures will start higher on Tuesday also provided some upward price incentive for canola.

The downswing in the value of the Canadian dollar on Monday further lifted canola futures, brokers said.

The upside in canola was tempered in part by the taking of profits. Reports of active seeding progress across the Canadian prairies also restricted some of the price advances. The ample supply of South American soybeans available on the global market at present also capped the gains, brokers said.

There were an estimated 2,771 canola contracts traded Monday, down from the 19,063 contracts that changed hands during the previous session.

No milling wheat, durum or barley contracts were traded during the session.

Prices are in Canadian dollars per metric ton.

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