By Phil Franz-Warkentin, Commodity News Service Canada, Dec. 5, 2012
Winnipeg – ICE Futures Canada canola contracts closed stronger on Wednesday, hitting their highest levels in over four weeks as a bullish Statistics Canada production report and a rally in CBOT soybeans provided support.
In its final production estimate of the year, StatsCan pegged the 2012/13 (Aug/Jul) Canadian canola crop at 13.3 million tonnes. The revised number was only down slightly from the previous forecast, but many analysts had been anticipating a slight improvement. Canada grew a record 14.6 million tonnes of canola the previous year, and the market will need to work to ration the smaller crop, said traders.
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Concerns over planting delays for soybeans in Argentina and the resulting rally in the CBOT soy complex provided spillover support for canola as well, according to participants.
A late move above nearby chart resistance at C$600 per tonne in the January contract was also supportive, triggering some buy stops and exaggerating the gains, said traders.
However, a firmer Canadian dollar and general uncertainty in the outside financial markets did temper the gains.
About 21,439 canola contracts were traded on Wednesday, which compares with Tuesday when 20,947 contracts changed hands. Spreading was a feature, accounting for about 16,236 of the contracts traded.
Milling wheat futures were down in light trade, as participants exited the December contract. Durum and barley futures were untraded and unchanged.
