ICE Canada Review: Canola Weakens With Soybeans

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By Phil Franz-Warkentin, Commodity News Service Canada

Nov. 7, 2012

Winnipeg – ICE Futures Canada canola contracts closed slightly lower in the most active nearby contracts on Wednesday, taking some direction from the softer tone in CBOT soybeans, according to participants.

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Light commercial hedges and speculative selling were said to be behind much of the weakness in canola. Relatively favourable crop prospects for soybeans in South America and expectations for an upward revision to the size of the US soybean crop from the USDA later this week also weighed on prices.
Bearish technical signals were another factor, with any attempts at taking prices higher likely seen as a good selling opportunity, according to an analyst.
Solid end-user demand did remain supportive for canola overall, as exporters and domestic crushers continue to offer good basis opportunities in western Canada in an effort to secure some of the ever tightening supplies from producers, said a trader.

The Canadian dollar was weaker on Wednesday, which provided some further support for canola.
About 6,844 canola contracts were traded on Wednesday, which compares with Tuesday when 9,920 contracts changed hands. Spreading accounted for about 1,816 of the contracts traded.
Milling wheat futures were untraded, but revised higher after the close. Durum and barley were untraded and unchanged.
Settlement prices are in Canadian dollars per metric ton.Price Change

Canola Jan 599.00 dn 1.50

Mar 596.40 dn 0.90

May 592.60 up 0.10

Milling Wheat Dec 310.30 up 1.80

Mar 319.80 up 1.80

Durum Dec 312.40 unch

Mar 319.00 unch

Barley Dec 250.00 unch

Mar 253.00 unch