By Phil Franz-Warkentin, Commodity News Service Canada
August 20, 2013
Winnipeg – ICE Futures Canada canola contracts were weaker on Tuesday, as speculative profit-taking came forward to weigh on values following Monday’s rally.
After canola climbed sharply in sympathy with the US soy complex on Monday both markets were due for a correction lower, according to participants.
In addition to the speculative selling, some farmer hedges were also coming forward, said traders. Canada’s canola crop is generally thought to be in good shape, and Monday’s bounce was seen as a good selling opportunity given the looming harvest pressure.
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However, hot and dry US weather conditions have led to some uncertainty over the state of the US soybean crop, which helped limit the losses in the canola market, said traders.
Scale down end user demand from domestic crushers also served to temper the declines.
Statistics Canada releases its first official production estimates of the year on Wednesday, and positioning ahead of the report was a minor factor. Traders generally expect canola production to come in well above the 13.3 million tonnes grown in 2012, with average estimates coming in at just over 15.0 million tonnes.
About 13,272 canola contracts were traded on Tuesday, which compares with Monday when 13,146 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged on Tuesday.
Settlement prices are in Canadian dollars per metric ton.
