CNS Canada — As traders exit the trading floor ahead of the holidays, canola futures continue to chop around amid thin volumes.
“More and more traders are stepping away from the market, either because of holidays or not wanting to have big positions on ahead of them,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
The January/March spread was the feature event in the market, he said, as investors were transferring from the older month to the new one.
On Monday and Tuesday, the ICE Futures Canada March canola contract traded below the $500 mark, which he said was significant.
“I still think we have some support underneath the market but with this holiday mode we may just chop around and go sideways,” said Ferley.
Markets will close early Friday in preparation for the Christmas holiday. That leaves just three trading days next week, Ferley noted, thus volumes have already started to drop noticeably.
“Expect that to continue as the week wears on,” he said, noting funds were still short in the market.
Funds may add to their positions in the days ahead depending on how the market performs, he said, noting the soybean complex has been pressured though by improved weather in Argentina.
On the other side of the market, though, he said ethanol and other biofuels were bolstered by some recent news.
“The Europeans have opened the market to biodiesel again,” he said. “The market got a little bounce off of that.”
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.