By Phil Franz-Warkentin, Commodity News Service Canada
April 4, 2013
Winnipeg – ICE Futures Canada canola contracts closed sharply lower on Thursday, dropping below nearby support as a move below some key chart points triggered additional sell stops.
Bearish technicals were the key driver taking canola down, with fund traders and other speculators behind most of the selling pressure, according to a broker. A move below the fifty day moving average in the front month contributed to the declines.
The weaker tone in CBOT soyoil contributed to the losses in canola, according to participants.
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However, the declines were tempered somewhat by scale down commercial buying, with both exporters and domestic crushers taking advantage of the downturn to book some coverage, said traders. A lack of significant farmer selling, as most producers have moved to the sidelines for the time being, provided further support.
In addition, concerns over possible seeding delays, due to the late spring snow melt, helped limit the losses as well.
About 24,598 canola contracts were traded on Thursday, which compares with Wednesday when 20,334 contracts changed hands. Inter-month spreading was a feature, accounting for about 13,450 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged.
Settlement prices are in Canadian dollars per metric ton.
