September 16, 2008

Rapeseed contracts on the ICE Futures Canada trading platform were significantly lower at 9:37 EDT.

Declines in global crude oil, Asian stock markets and other global vegetable oils helped to stimulate the commission house selling that took rapeseed down, market watchers said.

The financial sector was rocked over the weekend as Lehman Brothers Holdings Inc. announced it would file for bankruptcy protection and Merrill Lynch & Co. agreed to be acquired by Bank of America Corp.

Malaysian palm oil, Matif rapeseed values and the eCBOT soy complex were all down sharply overnight.

The losses in rapeseed were expected to be amplified by the lower opening of CBOT soy and soy oil values.

Brokers said investors in the financial sector hoping to limit losses, will bail out of their commodity positions, which should only further magnify the downward price slide in rapeseed and other vegetable oil markets.

Adding to the bearish sentiment in rapeseed will be the advancing harvest in western Canada and reports of good farmer deliveries during the weekend, traders said.

Underlying support in rapeseed, however, was expected to come from Chinese buyers' continued purchasing of Canadian rapeseed. Last week, exporters said China bought at least 150,000 tonnes of Canadian rapeseed and maybe as much as 300,000, for November/December shipment.