By Phil Franz-Warkentin, Commodity News Service Canada
March 13, 2013
Winnipeg – ICE Futures Canada canola contracts were weaker on Wednesday, dropping in sympathy with CBOT soybeans. Farmer hedges and speculative long liquidation was a feature.
In addition to the spillover from soybeans, Malaysian palm oil and European rapeseed futures were also lower in overnight activity.
The advancing soybean harvest in Brazil was causing investors to take some of the weather premiums that had built up in the North American futures, according to a broker accounting for some of the weakness in canola.
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Western Canadian farmers were also said to be making steady sales, as cash prices remain profitable and the break in soybeans had producers lowering their expectations for further upside in the canola market.
However, canola did lag soybeans to the downside, with the tightening supply situation in western Canada said to be a supportive influence overall. Solid exporter and domestic crusher demand on a scale-down basis also helped underpin the futures, according to participants.
About 11,201 canola contracts were traded on Wednesday, which compares with Tuesday when 8,410 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged.
Settlement prices are in Canadian dollars per metric ton.
