ICE Canola Backs Away From Early Gains

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By Phil Franz-Warkentin, Commodity News Service Canada

Dec. 17, 2012

Winnipeg – Canola contracts on the ICE Futures Canada platform were mostly weaker at 10:37 CST Monday, backing away from earlier gains as losses in the US grains and oilseeds spilled over to weigh on values.

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Canola initially moved higher in overnight activity, as gains in the CBOT soy complex and a move above nearby chart resistance provided support. However, losses in CBOT corn and wheat spilled over to the oilseeds and the resulting losses in the US futures weighed on canola as well, according to a broker.
Intermonth spreading accounted for most of the volumes in canola, as traders were busy rolling out of the January contract ahead of the New Year and holiday slowdown.
Firmness in the cash market, a lack of significant farmer selling, solid end user demand, and ongoing concerns over tightening supplies in western Canada did provide underlying support for canola, according to participants.

At 10:37 CST, about 13,000 canola contracts had changed hands with intermonth spreading behind the majority of the activity.
Durum futures were holding steady, with a handful of contracts traded. Milling wheat and barley were both untraded and unchanged.