By Dwayne Klassen, Commodity News Service Canada
January 16, 2013
WINNIPEG – Canola futures on the ICE Canada trading platform finished with advances Wednesday with strength linked to steady demand from the commercial sector and the gains posted by CBOT soybean and soyoil futures, market watchers said.
Activity in canola was described as being in the light to moderate category, although spreading did make up the bulk of the volume total in canola.
Early advances in canola were encouraged by the gains experienced in Malaysian palm oil and European rapeseed futures overnight. The expansion of the advances seen in CBOT soybean and soyoil futures further contributed to the gains seen in canola, traders said.
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Much of the commercial demand was said to have come from domestic processors, who were enjoying improved crush margins, brokers said. The covering of old export business was also evident and helped to generate some of the support in canola.
Ongoing concerns about tight canola ending stocks in Canada further lifted values. A minor downswing in the value of the Canadian dollar was also an underpinning price influence.
The upside in canola was restricted by the taking of profits at the highs of the day by a variety of market participants. Reports of increased farmer deliveries of canola into the cash pipeline in western Canada also tempered the upside price potential, brokers said. They noted that cash bids for canola, particularly in southern Manitoba remain attractive and have been enticing producers to open up their storage bins.
There were an estimated 18,109 canola contracts traded Wednesday, up from the 11,093 contracts that changed hands during the previous session. Of the contracts that changed hands, 13,114 were spread related.
No milling wheat, durum or barley contracts were traded. Milling wheat futures were raised at the close by ICE Canada.
Prices are in Canadian dollars per metric ton.
