ICE canola closes lower on outside oilseed declines

By Dwayne Klassen, Commodity News Service Canada

June 4, 2013

Winnipeg – Canola futures on the ICE Canada trading platform finished Tuesday’s session mainly on the defensive with the losses in the outside oilseed sectors behind some of the downward price action, market watchers said.

Adding to the price weakness was the rolling of positions out of the nearby July future and into the deferred contracts. Traders said the action had the impact of weighing on the nearby July future and tempering the loss in the deferred months.

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Weakness in the outside oilseed markets included Malaysian palm oil, European rapeseed and the CBOT soybean complex, brokers said.

A pick up in farmer deliveries of canola into the cash pipeline contributed to the downward price slide.

Reports of good seeding progress across much of the Canadian prairies and talk of very good crop development helped to contribute to the bearish price sentiment in the market, brokers said.

The taking of profits and some chart-based speculative and commodity fund liquidation further undermined canola futures.

The downside in canola was restricted by the downswing in the value of the Canadian dollar and from steady commercial buying interest. Much of that demand was said to be covering domestic crusher needs as well as routine export business.

The need to keep a weather premium built into values also provided some underlying support, brokers said.

There were an estimated 17,520 canola contracts traded Tuesday, down from the 24,834 contracts that changed hands during the previous session.

No milling wheat, durum or barley contracts were traded during the session.

Prices are in Canadian dollars per metric ton.

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