By Dwayne Klassen, Commodity News Service Canada
May 31, 2013
Winnipeg – Canola futures on the ICE Canada trading platform ended Friday’s session on a mainly lower footing although canola values did experience price movement to both sides of the plus/minus line during the day. Early support in canola was derived from the significant advances displayed by CBOT soybean futures, market watchers said. Much of the downward price action came late in the day and reflected the taking of profits as well as speculative and commodity fund liquidation orders.
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Evening up of positions ahead of the weekend and month-end was a feature of the activity seen in canola.
The rolling of positions out of the July future and into the November contract by the large index funds was also a feature of the activity. That price action put downward pressure on the July future and provided some support to the November future, brokers said.
A small pick up in elevator company hedge selling, tied in part to an increase in farmer deliveries of canola into the cash pipeline, helped to generate some of the weakness in the nearby months. The increase in farmer movement comes as planting operations on the Canadian prairies move towards the finish line, traders said.
Talk of good crop development in early planted canola, also sparked some minor selling interest.
The losses by CBOT soyoil also added to the bearisgh sentiment in canola.
The declines in canola were offset by the large gains seen in CBOT soybean values and the rain related delays in seeding soybeans in the US Midwest, brokers said.
The downswing in the value of the Canadian dollar helped to underpin canola as did steady commercial demand, said to be pricing old export business as well as some domestic crusher needs.
The need to keep a weather premium built into canola, as the crop is far from ready to be harvest, also lent new-crop months some support, traders said.
There were an estimated 20,213 canola contracts traded Friday, up from the 15,592 contracts that changed hands during the previous session. Of the contracts traded, 12,124 were spread related.
No milling wheat, durum or barley contracts were traded during the session.
Prices are in Canadian dollars per metric ton.
