Winnipeg Commodity Exchange Grain and Oilseed Futures Market Summary, June 14, 2004

Strategic Insights -

Canola futures at the Winnipeg Commodity Exchange (WCE) ended Monday's session higher due to tightness in old crop canola supplies, while feed grain futures declined due to favorable rainfall in western Canada. The Canadian dollar's weakness and strength in Chicago Board Of Trade soy complex futures also contributed to price increases in canola.

Key Takeaways:

  • Canola futures finished the session higher, with the July contract experiencing sharp gains, largely due to tightness in old crop canola supplies and favorable cash market conditions.
  • The July/Nov spread traded at C$20.00 to $23.00, and Nov/Jan traded at $4.00, indicating a significant gain in canola prices.
  • Export demand was relatively low, with Japan purchasing 3,000 to 4,000 tonnes of canola, while commercial selling and exporter price setting were evident in the market.
  • RBC Investments and Benson Quinn were identified as buyers, while Fimat was noted as a seller, with commodity funds taking on a relatively small position of about 400 contracts as they rolled their Nov contract position.
  • The market saw heavy activity in Nov 350 puts, mostly linked to commercial trade.
  • Agricore United was mentioned as buying barley and selling feed wheat, while Dreyfus was a notable buyer in the market.
  • Bearish technical signals, farmer pricing, and scale down buying contributed to weakness in feed grain futures, with heavy commercial and commission house selling dominating the trade.

Statistics:

  • Canola futures gained in moderate to good trade, with the July contract experiencing sharp gains.
  • The July/Nov spread traded at C$20.00 to $23.00.
  • Nov/Jan traded at $4.00.
  • July/Oct traded at $2.50.
  • Japan purchasing 3,000 to 4,000 tonnes of canola boosted export demand.
  • Commodity funds took on a position of about 400 contracts as they rolled their Nov contract position.
  • Heavy activity was seen in Nov 350 puts.
  • 3% (100 tonnes) of western Canada's crop was labeled as "driest areas".

Sources:

  • Resource News International via COMTEX (http://www.comtexnews.com)