By Phil Franz-Warkentin, Commodity News Service Canada
August 9, 2013
Winnipeg – ICE Futures Canada canola contracts were weaker on Friday, as the recent short-covering bounce ran out of steam and traders positioned themselves ahead of the weekend and a key USDA production report due on Monday.
Losses in the CBOT soy complex accounted for some of the spillover selling pressure in canola, according to participants.
Continued strength in the Canadian dollar, which has climbed by nearly a cent and a half relative to its US counterpart in the past two days, contributed to the weaker tone in canola. The stronger currency cuts into crush margins and also makes exports less attractive.
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Relatively favourable crop conditions across western Canada weighed on values as well, with expectations for large yields continuing to overhang the market, said traders.
However, the lateness of this year’s canola crop will leave many fields vulnerable to frost, which was serving to keep some risk premiums in the futures, said a trader.
A lack of significant farmer selling together with some scale-down end user bargain hunting was also said to be somewhat supportive.
About 8,712 canola contracts were traded on Friday, which compares with Thursday when 11,467 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged on Friday after seeing some price revisions following Thursday’s close.
Settlement prices are in Canadian dollars per metric ton.
