Canola Futures Close Mixed, Modest Gains on Tuesday

Canola futures closed modestly higher on Tuesday despite a choppy trading session, with brokers attributing the gains to strengthening crush margins, improved technical signals, and slow farmer selling. The Winnipeg Commodity Exchange (WCE) saw a record volume of 27,589 contracts traded, with canola accounting for about 85% of the volume. The Jan/Mar spread traded at C$6.20 to C$9.30, while the Jan/Nov spread traded at C$36.70 to C$37.80.

Key Takeaways:

• Canola futures closed modestly higher on Tuesday, with a record volume of 27,589 contracts traded.
• The Jan/Mar spread traded at C$6.20 to C$9.30, while the Jan/Nov spread traded at C$36.70 to C$37.80.
• The market saw a choppy opening, but turned higher as CBOT soyoil moved up and the Canadian dollar weakened.
• Domestic crushers were the strongest buyers, with commodity funds also participating in short covering.
• Commercial selling linked to country movement was also noted, while cash dealers indicated that farmer pricing increased following yesterday's gains, but was still light.

Statistics:

• 27,589 contracts traded on Tuesday, up from Monday's 18,347 contracts.
• Canola accounted for about 85% of the total trading volume.
• The Jan/Mar spread traded at C$6.20 to C$9.30.
• The Jan/Nov spread traded at C$36.70 to C$37.80.
• An estimated 23,406 contracts were involved in the spread trade.

Sources:

• Resource News International, Winnipeg Commodity Exchange (WCE) grain and oilseed futures, December 20, 2005
• Kwame Korboe