By Phil Franz-Warkentin, Commodity News Service Canada
August 6, 2013
Winnipeg – ICE Futures Canada canola contracts were sharply weaker on Tuesday, settling at fresh contract lows as bearish technical signals, good crop conditions, and increased farmer selling all weighed on values.
Forecasts look generally favourable for crop development across most of western Canada, which kept the path of least resistance to the downside in canola to start the week, said participants.
Losses in CBOT soybeans and European rapeseed futures added to the softer tone, with a move below nearby chart support in canola triggering additional speculative selling. Farmers were also noted sellers, as the latest downturn had producers looking to put some sales on the books before values drop even more, said a trader.
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On the other side, some routine, scale-down end user buying did help to limit the losses. The need to keep a bit of a weather premium built into the market, as the crop is still far from being made, also provided some underlying support, according to participants.
About 12,198 canola contracts were traded on Tuesday, which compares with Friday when 12,746 contracts changed hands. Spreading accounted for 2,402 of the contracts traded. Canadian markets were closed Monday for a civic holiday.
Milling wheat, durum and barley futures were untraded and unchanged on Tuesday.
Settlement prices are in Canadian dollars per metric ton.
