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Commodity futures

Winnipeg Commodity Exchange Grain and Oilseed Futures End Mixed, Canola Draws Support

Strategic Insights

— 2 min read

The Winnipeg Commodity Exchange grain and oilseed futures closed Wednesday's session mixed, with canola drawing support from a lack of significant selling and intermonth spreading contributing to volumes. Canola was narrowly mixed in a light to moderate trade, with the nearby contract lower and the Nov contract higher, as all other contracts remained unchanged. The market was pressured by the weak tone in Chicago Board of Trade soy complex futures, advances in planting amid favorable conditions, and ideas that canola is undervalued.

Key Takeaways:

  • The Winnipeg Commodity Exchange grain and oilseed futures closed Wednesday's session mixed, with canola drawing support from the lack of significant selling and intermonth spreading contributing to volumes.
  • The canola market was narrowly mixed in a light to moderate trade, with the nearby contract lower and the Nov contract higher, as all other contracts remained unchanged.
  • The market was pressured by the weak tone in Chicago Board of Trade soy complex futures, advances in planting amid favorable conditions, and ideas that canola is undervalued.
  • Exporters indicated that there was no fresh demand in the new crop "at these prices", limiting selling and supporting the market.
  • Farmer cash pricing is slow as producers remain on the land planting, and speculative selling is also limited by friendly technical factors in the market.
  • Exporter routine pricing was noted, with light speculative buying also evident, particularly in the July and Nov contracts.
  • New crop pricing is non-existent, said cash dealers, supporting both the Nov and Jan futures.
  • Feed grain futures ended mainly lower in light trade, with the weak tone in CBOT grains, advances in planting, and favorable growing conditions contributing to the weakness.
  • Farmer selling is very light, limiting trading volumes and keeping losses small.
  • Western barley posted losses in a commercial trade, with an estimated 250 contracts changing hands (down from 351 contracts on Tuesday).
  • Feed wheat also saw losses in a commercial trade, with the total volume estimated at 92 contracts (down from 155 contracts on Tuesday).

Statistics:

  • An estimated 2,286 contracts were involved in the spread trade (June 23).
  • The total canola volume was estimated at 6,914 contracts (down from 11,409 contracts on Tuesday).
  • The nearby canola contract was lower, while the Nov contract was higher.
  • Intermonth spreading contributed to the volumes in canola.
  • The weak tone in Chicago Board of Trade soy complex futures pressured the market.
  • Advances in planting amid favorable conditions also contributed to the weakness.
  • 250 contracts were involved in the western barley spread trade (down from 351 contracts on Tuesday).
  • 92 contracts were involved in the feed wheat spread trade (down from 155 contracts on Tuesday).

Sources:

  • Resource News International Winnipeg May 24-RNI, May 24, 2006 (Resource News International via COMTEX) -- Winnipeg Commodity Exchange (WCE) grain and oilseed futures closed Wednesday's session mixed with canola drawing some support from the lack of any significant selling, brokers said.

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