By Dwayne Klassen, Commodity News Service Canada
February 4, 2013
WINNIPEG – Canola futures on the ICE Canada trading platform finished Monday’s session on a firmer footing with continued concerns about tight old crop supplies and the strong usage pace providing the upward price momentum, market watchers said.
The buying back of previously sold positions ahead of Statistics Canada’s grain stocks in all positions report Tuesday morning also added to the friendly price tone in canola.
Some pre-report expectations believe the government agency has overstated canola production in Canada while others feel output has been under-estimated. Adjustments to those numbers were anticipated in the residual figures included in the report.
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Chart-based speculative and commodity fund buying contributed to the upward price action seen in canola with the advances in CBOT soybean and soyoil futures also spilling over to generate some light support, brokers said.
Some minor weakness in the Canadian dollar further underpinned canola futures.
The upside in canola was restricted by the taking of profits at the highs of the day. Steady elevator company hedge selling, tied to fairly aggressive farmer deliveries of canola into the cash pipeline, further tempered the price strength, brokers said. They noted the aggressive farmer selling was tied tot he strong premiums being offered by both domestic processors and elevator companies in select regions of the Canadian prairies.
Spreading was a feature of the activity in canola and contributed to the volume total.
There were an estimated 22,684 canola contracts traded Monday, down from the 29,146 contracts that changed hands during the previous session. Of the contracts that changed hands, 19,774 were spread related.
No milling wheat, durum or barley contracts were traded.
Prices are in Canadian dollars per metric ton.
