Canola Futures Close Mixed, Canola Prices Moderate Advances Due to Favorable Harvest Conditions

Strategic Insights -

Thursday's trading session in the Winnipeg Commodity Exchange (WCE) grain and oilseed futures saw canola prices moderate advances as a result of the strength in Chicago Board of Trade (CBOT) soyoil futures, trade sources said. However, as the gains in soyoil faded and soybean futures turned lower, canola prices came back to just modest advances. The favorable harvesting conditions, despite some isolated rain delays, and the overall high yielding and high quality canola crop this year have maintained pressure on the canola market.

Key Takeaways:

  • Canola futures closed Thursday's session mixed, with canola prices ending a bit higher in heavy trade.
  • The Nov/Jan spread traded at C$8.90 to $9.20, Nov/Mar at $15.60 to $16.30, Nov/May at $21.10 to $23.30, Nov/July at $25.40 to $28.00, Nov05/Nov06 at $33.50 to $37.00, and Jan/Mar at $6.50 to $6.80.
  • An estimated 4,884 contracts were involved in the spread trade, with the total volume estimated at 8,476 contracts, up from Wednesday's 6,268 contracts.
  • Canola prices started the day higher, prompted by the strength in CBOT soyoil futures, but came back to modest advances as the gains in soyoil faded.
  • The advancing harvest and favorable harvesting conditions have maintained pressure on the canola market.
  • Farmer pricing remained fairly strong, and crusher buying was noted, with routine export pricing also evident.

Statistics:

  • Total volume: 8,476 contracts (estimated)
  • Spread trade contracts: 4,884 (estimated)
  • Canola futures brushed off CBOT soyoil's gains, setting back 5 trading days
  • High yielding and high quality canola crop this year (according to private reports)
  • Crusher buying was noted, with routine export pricing also evident
  • Commercials supplied the bulk of the selling with farmer pricing a major part of those offerings

Sources:

  • Resource News International Winnipeg Sept 29, 2005 (Resource News International via COMTEX)
  • Winnipeg Commodity Exchange (WCE) grain and oilseed futures data