August 20, 2009

Canola contracts on the ICE Futures Canada platform were mainly higher Wednesday (August 19), with most of the activity confined to the two nearby contracts. Light commercial demand in the absence of willing sellers provided support, market watchers said.

Activity was described as choppy, with some participants taking to the sidelines to await Friday's crop-production update from Statistics Canada.

Support in the nearby canola futures was linked to the reluctance of producers to deliver into the cash pipeline and from the pricing of old export business, traders said. Some short covering ahead of the Statistics Canada crop-production report was also evident.

Ongoing concerns about an early frost in western Canada also continued to provide a firm floor for values, brokers said. However, there were ideas that the production report on Friday would show the crop at the end of July was in better shape than anticipated, brokers said.

Weakness in the Canadian dollar early Wednesday morning was a minor underpinning price influence for canola.

Weakness in canola was initiated by the declines posted overnight in Malaysian palm oil and European rapeseed. The lower opening in Chicago Board of Trade soy and soyoil futures with the start of the North American day session helped to encourage some selling in canola, brokers said. However, when CBOT soyoil values began to turn higher, the selling in canola began to subside.

An estimated 5,580 canola contracts traded at 10:37 a.m. CDT. Some 54 were spread related.

Five western barley futures traded.