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WCE close: Canola up on fund buying

Winnipeg (Resource News International) — Winnipeg Commodity Exchange (WCE) grain and oilseed
futures closed Wednesday’s session mainly higher with canola rallying on technically
driven commodity fund buying, brokers said.

Canola saw a moderate trade with only small amounts of intermonth spreading.

The total canola volume was estimated at 9,775 contracts, down from Tuesday’s
13,219 contracts, including an estimated 172 contracts which were involved in the spread
trade. Canola options saw an estimated 2,326 November 400 puts trade at $5.

Canola prices rallied from the outset in the wake of strength in Chicago Board of

Trade (CBOT) soy complex values and on gains in European rapeseed markets. The gains
triggered fresh speculative buying with commodity funds the single best buyer during the
session, traders said. Friendly technical signals and the move to fresh contract highs
prompted much of the speculative interest.

Contributing to the firm tone was the weak Canadian dollar and some
disappointment at canola yields in the recently harvested crop in Manitoba.

Canola drifted back from its highs when CBOT soybean futures turned lower,
although the market continued to derive support from the strength in soyoil prices.
Weighing on the market was the rapid pace of the harvest and heavy farmer pricing.

Routine exporter and crusher buying was evident with the bulk of the buying
coming from speculators. Commodity funds were estimated to have purchased 3,000 to
4,000 November contracts with commission houses also good buyers for their accounts.

The selling was mainly commercial with light profit taking evident. The bulk of the
selling came from elevator company hedging as farmer pricing continued to be

aggressive as cash bids have risen as high as $9.50/bu. in parts of Alberta. “These (farm
gate) prices are amazingly good considering we are in the middle of the harvest,” said
one cash dealer.

Feed grain futures ended mainly higher in light to moderate activity.

Western barley futures rallied in active trade with much of the volume comprised
of the rolling of October futures into the December futures. The market drew some support of talk
of disappointing yields in Alberta. However, the weakness in CBOT corn and lacklustre
end-user demand trimmed the market back to modest gains after setting fresh contract
highs earlier in the session.

Western barley ended a bit higher as an estimated 2,131 contracts traded, down
from 4,098 contracts traded on Tuesday. The bulk of the trade comprised of the October/December
spread with an estimated 1,262 contracts involved.

Feed wheat was firmer with the gains in CBOT wheat supporting values. The total
estimated volume was 441 contracts, up from Tuesday’s 12 contracts.

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