August 13, 2009

Grain and oilseed futures at the ICE Canada Futures market were lower at 9:47 a.m. EDT Wednesday (August 12) as weakness in palm oil values and ideas that Tuesday's big gains were overdone weighed on the market, brokers said.

 

Canola saw moderate trade as an estimated 2,053 contracts had traded by 9:48 a.m. EDT.

 

Canola was down in the overnight session on a weaker tone in international vegetable oil markets and ideas that Tuesday's rally was overdone. Canola did work its way back from lows and received some small support from Wednesday morning's USDA supply-demand report which was friendly for soy, traders said.

 

Canola is expected to continue to see losses as the North American trading session gets underway despite expected gains in the Chicago Board of Trade soy complex, traders said.

 

"Yesterday's gains were simply overdone," said a trader, "and we've got to give some of them back today."

 

However, traders also indicated if the CBOT soy complex rally, on the bullish USDA report, is stronger than expected it will pull canola higher.

 

The forecast for frost Thursday of next week is generally being treated with scepticism. However, the slow pace to farmer selling and the definite canola crop problems are giving some support to the market and limiting the weakness, said brokers.

 

Technically, traders are quite friendly to the market noting that the outlook is bullish with C$460 (US$422.07) in the Nov contract the next level likely to be tested.

 

Commercials and speculators have been buyers this morning, said traders. The selling is coming from some profit taking and commercial offerings.