By Phil Franz-Warkentin, Commodity News Service Canada
September 6, 2013
Winnipeg – ICE Futures Canada canola contracts were sharply weaker on Friday, moving below psychological support at the close as speculative selling, harvest pressure, and the strong Canadian dollar all weighed on values.
The most active November contract fell below C$500 per tonne in the final minutes of trade, with some speculative sell stops hit on the move lower, according to participants.
Harvest pressure across the Canadian Prairies contributed to the softer tone in canola, as producers are expected to make good progress bringing in a record large crop over the next month with no major weather threats in the immediate forecasts.
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The Canadian dollar was up by nearly a cent relative to its US counterpart on the back of better-than-expected employment data on Friday. The firmer currency was also bearish for canola, as it cuts into crush margins and also makes exports less attractive to international customers.
However, gains in CBOT soyoil did provide some spillover support for the canola market. The need to keep some risk premiums in the futures, as the harvest is still far from complete, also helped temper the declines.
Canadian canola stocks, as of July 31, 2013, came in at 608,000 tonnes, Statistics Canada reported. While that was lower than the 707,000 tonnes seen at the same time the previous year and well below the five-year average, the tight number was in line with trade guesses and expectations for a record large crop this year limited the impact of the tight carryover on the futures.
About 27,555 canola contracts were traded on Friday, which compares with Thursday when 35,002 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged after seeing some price revisions following Thursday’s close.
Settlement prices are in Canadian dollars per metric ton.
