April 29, 2008

Canadian rapeseed futures nosedive on CBOT soy and soyoil selloff

Rapeseed contracts on the ICE Futures Canada platform nosedived Monday morning (April 29, 2008) due to a selloff in CBOT soy and soyoil, market watchers said.

Rapeseed futures had earlier rose overnight from advances in Malaysian palm oil, Matif rapeseed futures and the e-CBOT soy complex, brokers said. Higher calls for CBOT soy and soyoil values at the opening of the North American session had also offered some support.

However, shortly after the opening soy and soyoil values at the CBOT turned sharply lower, sparking a wave of speculative and commission house liquidation orders in rapeseed, brokers said.

Continued delays in seeding the US corn crop and ideas that soy acreage will jump sharply also was viewed as bearish for rapeseed prices.

Lack of fresh export demand for Canadian rapeseed helped to pull prices lower, as did a scaling back in domestic crusher demand, traders said.

The huge price sell-off have further ensured that Canadian processors steered clear.

However, some underlying support in rapeseed was coming from the absence of hedge offers from line companies and some minor pricing of old export business by commercials, brokers said.

There were an estimated 6,091 rapeseed contracts traded at 10:28 a.m. CDT. Of the contracts traded, 3,116 were spread related.

Gains in CBOT corn futures provided some minor support for western barley contracts while the absence of demand was considered an undermining price influence, brokers said.