By Terryn Shiells, Commodity News Service Canada
July 11, 2013
WINNIPEG – ICE Futures Canada canola contracts closed lower on Thursday, despite receiving some spill over support from the gains seen in Chicago soybeans, analysts said.
Some of the weakness in canola was linked to the upswing in the value of the Canadian dollar, which made the commodity less attractive to foreign buyers. On Thursday afternoon, the Canadian dollar had moved more than a cent higher against its US counterpart since Wednesday’s close.
Spill over pressure from the losses seen in Chicago soyoil added to the bearish tone, as canola futures follow soyoil more closely than soybeans.
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Canola futures were also undermined by the arrival of beneficial weather across most of western Canada’s growing regions.
The good weather conditions have resulted in canola crops being able to flower longer than they did during the summer of 2012, traders noted. Generally, the longer the canola crops flower, the more seeds they produce.
A bearish USDA report, which showed higher 2013/14 soybean ending stocks and production, further weighed on prices.
A pick up in farmer selling in western Canada, as producers are become more confident in this fall’s crop prospects, also generated some of the downward price slide.
However, the need to keep a weather premium built into the market kept a firm floor under prices.
About 14,268 canola contracts were traded on Thursday, which compares with Wednesday when 14,440 contracts changed hands. Spreading accounted for 3,740 of the contracts traded.
Milling wheat, durum and barley futures were untraded on Thursday.
Settlement prices are in Canadian dollars per metric ton.
