By Phil Franz-Warkentin, Commodity News Service Canada
Jan. 2, 2013
Winnipeg – ICE Futures Canada canola contracts traded to both sides of unchanged on Wednesday, but closed with losses in the most active months as declines in CBOT soybeans spilled over to weigh on prices.
Sharp losses in CBOT soybeans accounted for most of the spillover selling pressure in canola, according to traders, although strength in soyoil did help limit the downside in the Canadian market.
Relatively favourable crop conditions for soybeans in South America were also overhanging the oilseeds. The stronger Canadian dollar was another bearish price influence on canola, according to participants.
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Technical signals caused canola to back away from earlier gains as well, with the March contract running into resistance as it neared the C$600 per tonne level.
However, the gains in CBOT soyoil provided underlying support for canola throughout the session. The US budget deal was reported to have included a US$1 per gallon tax credit for biodiesel production, which accounted for some of the strength in bean oil.
A lack of significant farmer selling and the ongoing concerns over tightening supplies in western Canada were also said to have underpinned canola values.
About 11,762 canola contracts were traded on Wednesday, which compares with Monday when 10,518 contracts changed hands. Spreading accounted for about 5,922 of the contracts traded.
Milling wheat, durum, and barley futures were untraded and unchanged.
