By Phil Franz-Warkentin, Commodity News Service Canada
October 4, 2013
Winnipeg – ICE Futures Canada canola contracts were weaker on Friday, taking back all of Thursday’s gains as speculative selling, farmer hedges, the firmer Canadian dollar, and the rising production prospects all weighed on values.
Updated crop estimates from Statistics Canada released this morning pegged canola production at a record 15.97 million tonnes, which was well above the previous forecast of 14.74 million and the 13.87 million tonnes grown the previous year. While traders still anticipate an even larger crop in subsequent reports, the confirmation of the rising yields was enough to keep the bias to the downside.
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Steady farmer hedges and a lack of the speculative short-covering that had underpinned prices earlier in the week added to the softer tone, said traders. Losses in European rapeseed futures were also bearish for canola.
However, chart support did manage to hold to the downside, with solid end user demand providing support underneath the market. Gains in CBOT soybeans provided some spillover support as well.
About 31,454 canola contracts were traded on Friday, which compares with Thursday when 48,938 contracts changed hands. Spreading accounted for 22,752 of the contracts traded.
Milling wheat, durum and barley futures were untraded.
Settlement prices are in Canadian dollars per metric ton.
