June 10, 2008

Canadian rapeseed futures follow CBOT soy complex higher

Rapeseed futures traded on the ICE Canada platform posted gains as of 10:54 a.m. CDT Monday (June 9, 2008).

Wet weather and seeding-delay concerns were generally supporting CBOT soy and soyoil values, which accounted for much of the strength in rapeseed, market watchers said.

However, the nearby July and August CBOT soy contracts had broken lower and were moving between small gains and small losses. According to traders, that was causing some nervousness in the rapeseed market.

Aside from the mainly higher CBOT soy complex, values found additional support from technical buying, brokers said. Rapeseed prices were further underpinned by the weak Canadian dollar, which encouraged domestic processor and routine exporter demand, according to traders.

Limiting rapeseed's upward price advance were timely rains in parts of Western Canada, traders said. However, some areas of Saskatchewan reportedly saw little moisture compared to other Canadian prairie regions and as a result dryness was still very much a concern in those pockets.

Reports Monday that farmers in Argentina had suspended their strike further helped to undermine rapeseed futures, according to brokers.

Finally, the lack of fresh export demand weighed on the market as well.

Some trade participants were thought to be taking defensive positions ahead of the USDA supply/demand report scheduled for release Tuesday, according to brokers.

Volume in rapeseed was moderate, with 7,926 contracts having changed hands as of 10:54 a.m. CDT. Of that amount, 3,726 trades were spread-related.

Meanwhile, western barley futures were steady to higher amid thin trade. Strength was tied to the advances in CBOT corn contracts, with commercials the featured participants. As of 10:54 a.m. CDT, only 12 contracts had been traded.