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Commodity futures

Winnipeg Commodity Exchange Grain and Oilseed Futures Close Mixed on Burdensome Canola Supplies and Disappointing Export News

Strategic Insights

— 1 min read

The Winnipeg Commodity Exchange (WCE) grain and oilseed futures closed Thursday's session with mixed results, with canola posting fresh contract lows due to burdensome canola supplies and disappointing export news. The market ignored the mixed choppy tone in Chicago Board of Trade soy complex futures and focused on canola oversupply, trade sources said. The Canadian dollar and bearish technical signals also contributed to the decline in canola prices. Despite some positive news, such as Mexico taking a cargo of canola and expectations of light deliveries against the Nov canola contract next week, the market remained sluggish due to large supplies and sluggish demand.

Key Takeaways:

  • The WCE grain and oilseed futures closed Thursday's session mixed, with canola posting fresh contract lows due to burdensome canola supplies and disappointing export news.
  • The Canadian dollar and bearish technical signals contributed to the decline in canola prices, making it a bearish feature of the trade.
  • Talk of one or two more cargoes of canola being canceled by a Chinese crusher due to problems with its letters of credit further supported the decline in canola prices.
  • The expansion of a Chinese crusher in Canada was canceled due to problems with letters of credit, leading to reduced exports.
  • Mexico took a cargo of canola this week, and expectations of light deliveries against the Nov canola contract next week were supportive of the market.
  • Routine commercial scale down buying was evident coming from both export and crush sources.
  • Elevator companies and cash dealers supplied the bulk of the selling in canola, with small end user buying taking some contracts higher.

Statistics:

  • 7,560 contracts were involved in the spread trade.
  • The estimated volume for the session was 10,868 contracts, down from Wednesday's 14,484 contracts.
  • The Nov/Jan spread (5,168 contracts) traded at C$9.60 to $12.00.
  • The Nov/Mar spread (144 contracts) traded at $18.00 to $19.70.
  • The Nov05/Nov06 spread (332 contracts) traded at $43.00 to $44.00.
  • The Jan/Mar spread (1,642 contracts) traded at $8.50 to $9.00.
  • The Jan/July spread (8 contracts) traded at $23.00 to $24.60.
  • The May/July spread (262 contracts) traded at $6.80 to $7.50.
  • The Mar/May spread (4 contracts) traded at $7.00.

Sources:

  • Resource News International, "Winnipeg Commodity Exchange grain and oilseed futures close mixed", Winnipeg, Oct 27, 2005 (Resource News International via COMTEX)

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