Winnipeg Commodity Exchange: Canola and Oilseed Futures Update

Strategic Insights -

The Winnipeg Commodity Exchange saw mixed trading in canola and oilseed futures on Wednesday, May 11, 2005, with canola experiencing downward pressure due to slow demand and weakness in Chicago Board Of Trade soyoil futures. Canola prices dropped moderately in the early session, driven by hedge selling by cash dealers and technical-based selling following the market's inability to break above the July trading range at $290 per metric ton. However, losses in the Canadian dollar and improved crush margins generated support for the canola market, allowing it to come back to nearly unchanged by the end of the session.

Key Takeaways:

  • Canola futures prices dropped moderately in the early session due to hedge selling by cash dealers, which sent the market down in line with declines in Chicago Board Of Trade soy complex futures.
  • Technically-based selling also occurred in reaction to the market's inability to push above the top end of the July trading range at $290 per metric ton.
  • The lack of fresh demand contributed to the weak tone, with the only export buying felt to be routine Japanese pricing.
  • Steep losses in the Canadian dollar generated support in the canola market, improving crush margins to the best levels of the week.
  • Commercials appeared on both sides of the canola trade, with crushers seen as the best buyers and cash dealers as sellers early in the session.
  • Feed grain futures ended narrowly mixed in light trade, ignoring losses in the CBOT grain futures and receiving some support from slow country selling and firm cash market bids.
  • Feed wheat futures were little changed in commercial trade, with an estimated 53 contracts changing hands, up from 52 contracts on Tuesday.
  • Western barley finished the session unchanged to fractionally higher in light commercial trade, with small spread activity in July/Oct at $6.20 as total volumes were estimated at 375 contracts, up from Tuesday's 201 contracts.

Statistics:

  • Estimated 2,912 contracts involved in the spread trade, with a total estimated volume of 4,371 contracts, up from Tuesday's 3,196 contracts.
  • The July/Nov spread traded at C$7.30 to C$7.70, with the bulk of the activity at C$7.50.
  • The Nov/Mar spread traded at C$14.00 to C$15.00.
  • Don Bousquet, a representative from the Resource News International, provided the information.
  • Resource News International, Copyright 2005, provided the news.

Sources:

  • Resource News International via COMTEX (Copyright 2005)
  • Don Bousquet, Resource News International (May 11, 2005)
  • COMTEX (http://www.comtexnews.com)