By Dwayne Klassen, Commodity News Service Canada
Winnipeg – December 27/12 – Canola futures on the ICE Canada
trading platform finished mostly on the defensive Thursday with much
of the downward price action associated with the sell-off seen in CBOT
soybean values on Wednesday and Thursday, market watchers said. The
ICE Canada platform was closed on Wednesday for the Boxing Day holiday
but US markets were open, with CBOT soybeans posting some large losses
during that session.
Much of the volume total in canola consisted of spreading, with
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into more deferred positions ahead of the January contract becoming a
cash delivery month.
The weakness in canola also reflected a drop off in domestic
processor demand, with profit-margins for the sector deteriorating
further, brokers said. Steady farmer deliveries of canola into the
cash pipeline, as reflected by Canadian Grain Commission weekly
statistics, further added to the bearish sentiment in canola, traders
said.
End of year liquidation orders from a variety of market
participants was also evident and contributed to the price declines.
The bearish sentiment in canola also came from the favourable
weather conditions for the development of the soybean crops in South
America, brokers said.
The losses in canola were tempered in part by scale down buying
interest from commercials. Much of that demand was said to be the
pricing of old export business to Japan.
Sentiment that canola futures are oversold and in need of a
correction to the upside, also slowed the price drop in canola.
Weakness in the Canadian dollar also was an minor underpi9nning price
influence.
There were an estimated 29,785 canola contracts traded Thursday,
up from the 9,254 contracts that changed hands during the previous
session. Of the contracts that changed hands, 29,766 were spread
related.
No milling wheat, durum or barley contracts were traded.
Prices are in Canadian dollars per metric ton.
