Dwayne Klassen, Commodity News Service Canada
May 31, 2013
Winnipeg – Canola contracts on the ICE Futures Canada platform were trading in a narrowly mixed price range at at 10:22 CDT Friday morning with participants taking a ‘wait-and-see’ approach with canola instead of following CBOT soybeans up, market watchers said.
A good portion of the activity consisted of spreading, with the large index funds starting to roll out of the nearby July future and into the November contract, brokers said.
The evening up of positions ahead of the weekend was also a feature of the activity in canola.
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Weakness in the nearby months was associated in part with a small pick up in elevator company hedge selling, with farmers who have finished seeding starting to concentrate on marketing issues, brokers said.
Some of the bearish tone in canola also reflected the fact that a good portion of the canola crop in western Canada has been seeded and that the fields that were planted early were showing excellent emergence, traders said.
However, brokers also acknowledged that the canola crop is far from being harvested and the need to keep a weather premium built into values was helping to keep a firm floor under the market.
Light commercial demand, said to be routine exporter pricing and covering some domestic crusher needs, provided some minor support for the newer crop canola contracts.
The downswing in the value of the Canadian dollar and rain related seeding delays preventing US farmers from planting soybeans was also considered supportive, traders said.
As of 10:22 CDT, about 12,374 canola contracts had traded. Of the contracts traded, 7,412 were spread related.
Milling wheat, durum and barley contracts were unchanged and untraded.
Prices in Canadian dollars per metric ton at 10:22 CDT:
