By Dave Sims, Commodity News Service Canada
WINNIPEG, June 6 – Canola contracts on the ICE Futures Canada platform were stronger at 10:45 CST Friday, as crushers took advantage of favorable margins and advances in soyoil.
Gains in CBOT Soyoil were a major supportive feature according to an analyst. Crushers are moving right now, an analyst added, because crush margins are good, the dollar is down and oil is stronger. Crushers are making sure they have some canola and selling the oil, selling the meal and hedging the dollar.
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If the market heads lower, farmers are going to sell on the way down, not the way up a broker said, adding growers don’t like these prices and will be waiting for rallies.
The weak Canadian dollar was also somewhat supportive.
Long liquidation on the other side tempered the advances.
If funds take on short positions “I don’t know who’s going to buy this market,” said an analyst. He predicts buyers will step away from the old crop and try to pick up some value on new crop. However the timing will be difficult as there’s not much time to put a July position on, and he said it’s potentially dangerous to go short on November right now.
Around 9,000 contracts had traded as of 10:45 CDT, Friday, with the July/November spread accounting for the bulk of the activity.
