By Dwayne Klassen, Commodity News Service Canada
May 28, 2013
Winnipeg – Canola futures on the ICE Canada trading platform finished Tuesday’s session with significant advances. The downswing in the value of the Canadian dollar encouraged some aggressive buying as did the sharp gains experienced by CBOT soybean values, market watchers said.
The July future posted the best advance during the session with some of the gains spurred on by chart-based demand from speculative and commodity fund accounts, brokers said. Some participants felt that the upside in the July canola future was also tied to attempts by short position holders to liquidate those contracts.
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Support in canola was also derived from the rain related seeding delays on the Canadian prairies and the absence of significant farmer deliveries into the cash pipeline, traders said.
Steady commercial demand, believed to be pricing old export business and some domestic processor needs, also helped to generate some price strength for the deferred canola contracts.
The tight old crop supply situation and the need to produce large new crop stocks, helped to fuel some of the upside price potential, brokers said.
The upside in canola was tempered in part by the taking of profits at the highs of the day. The large supply of South American soybeans on the global market also capped some of the price gains.
There were an estimated 23,277 canola contracts traded Tuesday, up from the 2,771 contracts that changed hands during the previous session. Of the contracts traded, 9,118 were spread related.
No milling wheat, durum or barley contracts were traded during the session.
Prices are in Canadian dollars per metric ton.
