By Phil Franz-Warkentin, Commodity News Service Canada
Dec. 21, 2012
Winnipeg – Canola contracts on the ICE Futures Canada platform were higher at 10:48 CST Friday, seeing a corrective bounce after posting large losses earlier in the week.
Gains in the Chicago soy complex, along with advances in Malaysian palm oil in overnight activity, provided the catalyst for the bounce in canola, according to traders.
“We’re seeing a kickback after the massive slide earlier in the week,” said a broker. In addition to the speculative and end user buying interest in the market, a lack of willing sellers contributed to the gains in canola as “farmers have locked their bins” ahead of the New Year.
Weakness in the Canadian dollar, which was down by nearly three-quarters of a cent compared to its US counterpart, helped prop the canola market up as well. The weaker currency was making crush margins more attractive, according to a broker.
However, global economic uncertainty and ideas that the overall technical outlook has turned lower for canola did temper the advances, said participants.
The relatively favourable crop prospects for soybeans in South America were also overhanging the oilseed markets.
At 10:48 CST, about 5,000 canola contracts had changed hands. Trade was described as thin and choppy, with participants moving to the sidelines ahead of the Christmas holiday. ICE Canada will close early on Monday, December 24, and remain closed December 25 and 26 for Christmas and Boxing Day.
Milling wheat, durum, and barley futures were untraded and unchanged.