By Phil Franz-Warkentin, Commodity News Service Canada
Dec. 10, 2013
Winnipeg – ICE Futures Canada canola contracts dropped sharply on Tuesday, setting fresh contract lows for the third straight session as speculative sell stops were hit on the way down.
Fund traders and other speculators liquidating long positions or building new short positions were behind much of the weakness, according to traders. Panic farmer selling, as the market was showing no signs of bottoming out, contributed to the declines, said a broker.
The record large Canadian canola crop remains a major bearish influence overhanging the market, with the firmer tone in the Canadian dollar also said to be behind some of Tuesday’s selling.
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A turn lower in CBOT soybeans helped exaggerate the downward move in canola. However, oversold price sentiment and scale-down end user pricing did temper the declines to some extent. Crush margins remain very favourable for the domestic processors.
About 68,962 canola contracts were traded on Monday, which compares with Friday when 46,125 contracts changed hands. Spreading was a feature, accounting for 65,730 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after wheat saw some price adjustments following Monday’s close.
