By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 14 (MarketsFarm) – ICE Futures canola contracts were up sharply at midday Tuesday, as a ‘turnaround Tuesday’ rally in the Chicago Board of Trade soy complex provided spillover support.
“It’s a weather story,” said a trader noting that weather concerns in the United States Midwest triggered some speculative short covering.
Dryness concerns in parts of Western Canada were also underpinning the canola market, causing “the small (speculators) to look to the sidelines,” the trader added. Forecasts calling for colder Prairie temperatures into the end of May were also supportive.
Some technical stops were hit on the way up, which added to the firmer tone. However, the trader added that the longer-term downtrend remains intact.
Ongoing uncertainty over trade relations with China also kept some caution in the canola market.
About 19,000 canola contracts traded as of 10:49 CDT.
Prices in Canadian dollars per metric tonne at 10:49 CDT:
Canola Jul 442.20 up 6.30
Nov 453.70 up 7.00
Jan 460.10 up 7.10
Mar 465.70 up 6.80