By Phil Franz-Warkentin, Commodity News Service Canada
August 8, 2013
Winnipeg – Canola contracts on the ICE Futures Canada platform were stronger at 10:50 CDT Thursday, as speculative short-covering in the oversold market provided support.
Canola was looking underpriced compared to CBOT soybeans after dropping earlier this week and the market was now “catching up,” according to a broker who said much of the buying interest was tied to speculators covering short positions. “There are a lot of profits on the table for the shorts,” he added.
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Solid end user demand was also supportive, with domestic crushers believed to be buying canola while selling CBOT soyoil.
Uncertainty over US soybean production prospects were also underpinning canola values, although traders said the canola crop itself was in relatively good shape. While recent cooler temperatures have led to some concerns over a possible early frost in western Canada, the forecasts have turned warmer heading into the next week.
The overall technical trend remains pointed downward, which tempered the advances in canola, according to traders. Strength in the Canadian dollar was also said to be limiting the gains.
At 10:50 CDT, about 8,000 canola contracts had changed hands.
Milling wheat, durum, and barley futures were untraded and unchanged after seeing prices updated by the Exchange after Wednesday’s close.
Prices in Canadian dollars per metric ton at 10:50 CDT:
