By Phil Franz-Warkentin, Commodity News Service Canada
August 1, 2013
Winnipeg – ICE Futures Canada canola contracts were stronger on Thursday, with speculative short-covering and solid end user demand helping the market see a follow-through bounce off of recent lows.
Weakness in the Canadian dollar provided the catalyst for the move higher in canola, according to participants. The Canadian currency was down by over half a cent relative to its US counterpart. The softer currency, together with gains in Chicago soyoil, helped crush margins improve and made exports more attractive.
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Concerns over unseasonably cool temperatures across parts of western Canada were also underpinning the canola market, according to a broker. However, crop conditions do remain relatively favourable overall, and the mounting expectations for a large crop this year did temper the upside potential.
While canola was due for a corrective bounce, the overall technical trend remains pointed lower, according to analysts who said the move higher was likely seen as a good selling opportunity from a chart standpoint.
About 14,609 canola contracts were traded on Thursday, which compares with Wednesday when 10,610 contracts changed hands. Spreading accounted for 7,628 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged on Thursday.
Settlement prices are in Canadian dollars per metric ton.
