By Phil Franz-Warkentin, Commodity News Service Canada
Dec. 21, 2012
Winnipeg – ICE Futures Canada canola contracts were higher on Friday, seeing a technical correction to end the week after posting sharp declines for four straight sessions.
Gains in the CBOT soy complex, along with advances in Malaysian palm oil in overnight activity, provided the catalyst for the bounce in canola, said traders. Bargain hunting from end users, along with speculators moving back to the buy side, accounted for much of the strength in the outright trade.
A lack of willing sellers contributed to the gains in canola as farmers remained on the sidelines ahead of the New Year.
Weakness in the Canadian dollar, which was down by about half a cent compared to its US counterpart, helped prop the canola market up as well. The weaker currency makes crush margins more attractive.
However, global economic uncertainty and ideas that the overall technical outlook has turned lower for canola did temper the advances, said participants.
The relatively favourable crop prospects for soybeans in South America were also said to be overhanging the oilseed markets.
About 26,153 canola contracts were traded on Friday, which compares with Thursday when 30,098 contracts changed hands. Spreading accounted for about 21,030 of the contracts traded.
Milling wheat, durum, and barley futures were untraded and unchanged.