By Phil Franz-Warkentin, Commodity News Service Canada
August 2, 2013
Winnipeg – ICE Futures Canada canola contracts were stronger on Friday, with speculative short-covering and solid end user demand helping prop up the market ahead of the long weekend.
After setting contract lows earlier this week, canola bounced higher for three sessions in a row as speculators continued to buy back some of their recently sold positions.
The Canadian dollar was weaker on Friday, which added to the firmer tone in canola, as the softer currency encouraged some end user demand, said traders.
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Cooler than normal temperatures across western Canada were also providing some support, with uncertainty over weather conditions going forward serving to keep some risk premiums in the futures.
However, the crop conditions do remain relatively favourable overall, which tempered the upside potential, said participants. Losses in CBOT soybeans and soyoil were also overhanging the market.
The general technical trend remains pointed lower for canola, making any advances good selling opportunities from a chart standpoint. The most active November contract climbed as high as C$499 per tonne during the session, but ran into resistance at the highs and backed away by the close.
Positioning ahead of the long weekend was another feature. Canadian markets will be closed Monday for a civic holiday while US markets will remain open.
About 12,746 canola contracts were traded on Friday, which compares with Thursday when 14,609 contracts changed hands. Spreading accounted for 3,132 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged on Friday.
Settlement prices are in Canadian dollars per metric ton.
