By Dwayne Klassen, Commodity News Service Canada
March 25, 2013
WINNIPEG – Canola futures on the ICE Canada trading platform finished Monday’s session on the defensive with much of the downward price action tied to sentiment that values are over bought and in need of a correction to the downside, market watchers said.
Activity in canola was described as light and choppy with participants hesitant to establish new positions given the USDA prospective plantings report scheduled for release on Thursday and ahead of the three day Good Friday holiday weekend.
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Canola had found early support from light commercial demand and the absence of significant farmer deliveries of canola into the cash pipeline in western Canada, traders said. Much of the commercial interest was said to be covering domestic crusher needs as well as some light export commitments.
Early strength in canola had also been associated with light speculative fund buying, tied in part to the tight old crop supply situation. The minor advances in most CBOT soybean and soyoil contracts also provided some underlying support.
Firmness in the Canadian dollar Monday along with the taking of profits at the highs, helped to weigh on canola futures. Declines in Malaysian palm oil futures overnight further undermined values.
News that Australia had sold canola to China helped to weigh on ICE canola futures as did the advancing harvest of a record sized soybean crop in South America, brokers said.
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Concerns about seeding delays on the Canadian prairies due to excessively wet and cool weather conditions, helped to provide some minor support to new crop canola, brokers said.
There were an estimated 14,077 canola contracts traded Monday, down from the 16,601 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.
