By Phil Franz-Warkentin, Commodity News Service Canada
February 5, 2015
Winnipeg – Canola contracts on the ICE Futures Canada platform were stronger at midday Thursday, as advances in outside vegetable oil markets provided support.
Malaysian palm oil was leading to the upside in global vegetable oil markets, as Indonesia announced plans to raise subsidies on the production of biodiesel. Large advances in CBOT soyoil and the outside energy markets were also supportive for canola, according to a broker.
Commercial and speculative positioning accounted for much of the activity, with most of the volumes linked to inter-month spreading.
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The Canadian dollar was also sharply stronger on Thursday, which did temper the upside potential as the firmer currency makes exports less attractive. However, a broker noted that domestic crush margins were still solid overall, with the gains in soyoil more than compensating for the rising currency.
Scale-up farmer hedges were also said to be coming forward to limit the gains.
About 10,000 canola contracts had traded as of 10:46 CST.
Milling wheat, durum and barley were all untraded.
Prices in Canadian dollars per metric ton at 10:46 CST:
