Winnipeg Commodity Exchange Canola Futures Decline

Strategic Insights -

Canola futures at the Winnipeg Commodity Exchange (WCE) experienced a sharp decline on Monday, September 20, 2004, due to bearish technical signals, commodity fund selling, and a firm Canadian dollar. The advancing harvest on the eastern prairies also weighed on the market, as did sluggish fresh demand and forecasts for beneficial weather. However, inclement weather in Alberta and tight cash markets as farmers focused on harvesting and not delivering limited the decline. Commodity funds increased their short position by 1,000 to 1,500 contracts, and traders estimated their short positions at 2,500 to 4,000 contracts.

Key Takeaways:

  • Canola futures declined on Monday, September 20, 2004, due to bearish technical signals, commodity fund selling, and a firm Canadian dollar.
  • The advancing harvest on the eastern prairies, sluggish fresh demand, and forecasts for beneficial weather contributed to the price slide.
  • Inclement weather in Alberta and tight cash markets as farmers focused on harvesting and not delivering limited the decline.
  • Commodity funds increased their short position by 1,000 to 1,500 contracts, and traders estimated their short positions at 2,500 to 4,000 contracts.
  • Agricore United was an early seller but later became a buyer, while Refco was a featured seller.
  • The farm gate price being at a considerable premium to futures left the market untraded but prices firm.
  • Feed grains were steady to a bit lower in light trade, with Western barley seeing little change due to lack of farmer selling.
  • Commission house short covering and end user scale-down buying met commission house and commercial selling in feed wheat.

Statistics:

  • Canola futures declined by an unspecified amount on Monday, September 20, 2004.
  • Commodity funds increased their short position by 1,000 to 1,500 contracts.
  • The short position of commodity funds is estimated to be between 2,500 and 4,000 contracts.
  • The farm gate price is at a considerable premium to futures.
  • The WCE experienced moderate to light trade in various commodities.

Sources:

  • Resource News International via COMTEX
  • Winnipeg Commodity Exchange (WCE)
  • COMTEX (http://www.comtexnews.com)