April 1, 2008

ICE rapeseed drops limit on increased soy acreage

ICE Futures Canada closed with rapeseed dropping its daily limit on Monday morning's USDA report indicating that US farmers may plant 18 percent more acreage for soy.

Rapeseed saw a large trade as index funds rolled their May futures into the July contract.

Traders did feel that the fund activity was smaller than anticipated as the limit decline in rapeseed caused some companies to pull their spread orders.

Total rapeseed volume was estimated at 18,885 contracts, up from 16,830 contracts on Friday.

Rapeseed traded lower overnight in the wake of losses in European and Asian vegetable oil market ahead of USDA's grain stocks and plantings report.

The reports were bearish and prompted further weakening in the rapeseed market.

It was the move to limit losses in CBOT soy complex futures when trade opened in the US that eventually sent rapeseed to its limit declines.

The lack of fresh export demand, as commercials took to the sidelines after the release of the report, and bearish technical signals pressured the market down with stop loss selling triggered on the way down.

Routine exporter and crusher buying met commercial selling and commission house and fund liquidation selling.

Elevator company hedge selling was light. The market closed at limit down in two adjacent contracts which will result in the daily limit widening out to CAD60 (US$59) per tonne with the new session on Monday evening.