By Dave Sims, Commodity News Service Canada
Winnipeg, September 1 – The ICE Futures Canada canola market suffered losses to end the week, dragged lower by action in the Canadian currency.
The Canadian dollar was over half a cent stronger, compared to its US counterpart, which made canola less attractive to international buyers.
“Funds continue to liquidate longs (positions) and volumes have been pathetic,” noted a trader in Winnipeg.
He adds spread activity has been light and the technical trend is pointed lower.
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Yesterday’s Statistics Canada production estimate may also have weighed down prices. In it, the agency raised last year’s production total for the canola crop from 18.4 million tonnes to 19.6 million. It pegged this year’s production number at 18.2 million tonnes, which was in the middle of analysts’ expectations.
Losses in Malaysian palm oil were also bearish for canola.
The November contract took a brief run at the C$500 mark, but was quickly beaten back by bears in the market.
Gains in US soyoil provided some support for values.
Traders were positioning themselves before the Labour Day holiday. Markets in the US and Canada will both be closed on Monday.
Around 18,860 canola contracts were traded on Friday, which compares with Thursday when around 20,541 contracts changed hands. Spreading accounted for 7,246 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
Soybeans rose four to five cents on Friday as traders went bargain hunting in the early going while large funds covered shorts.
Demand remains solid for US soybeans and the outside chance of a frost in the northern Midwest next week supported prices.
The front-month contract appears to have run into some technical resistance at US$9.50 a bushel.
Corn finished two cents weaker as traders took profits before the weekend.
The next USDA crop production report is scheduled September 12 and early estimates put the US corn yield at 166.9 bushels an acre.
Forecasts calling for cold temperatures in the US next week were supportive.
Wheat was two to four cents higher due to reasonable demand.
The market appears to have hit some support levels and traders were staking positions before the close.
The long weekend is likely to see rapid harvest activity across the US, which was bearish.
