Winnipeg Commodity Exchange Sees Mixed Trading Session on October 8, 2004

Strategic Insights -

Traders on the Winnipeg Commodity Exchange (WCE) experienced a mixed session on October 8, 2004, as most of the selling occurred in the canola pit. The Canadian dollar's strength and hedge pressure allowed canola to drop to new contract lows. Position evening ahead of the long Canadian Thanksgiving Day holiday weekend was a notable feature of the activity. Elevator company hedge selling weighed heavily on canola futures, with some of this activity inspired by sentiment that good harvest progress will be made during the holiday weekend.

Key Takeaways:

  • Canola futures dropped to new contract lows due to strength in the Canadian dollar and hedge pressure.
  • Elevator company hedge selling was a significant feature of the activity, with some sellers inspired by the idea that 90% of the canola crop will be in the bin by late Monday night.
  • The absence of fresh export demand and the strong Canadian dollar contributed to the downward price slide.
  • Spreading of the Nov/Jan contracts at C$5.60 to $5.80 under helped to bolster the volume total.
  • Louis Dreyfus was a notable seller of canola during the session.
  • Western barley futures were slightly higher due to light commission house short-covering and the absence of hedge offers.
  • Light end-user demand helped to keep a firm floor under barley prices.
  • Feed wheat futures were higher due to sentiment that values are oversold and in need of an upward correction, with commission house short-covering further underpinning prices.

Statistics:

  • Canola futures dropped to new contract lows.
  • The Canadian dollar's strength contributed to the downward price slide.
  • Elevator company hedge selling accounted for a significant portion of the selling activity.
  • 90% of the canola crop was expected to be in the bin by late Monday night.
  • The WCE will be closed on October 11 in observance of the Canadian Thanksgiving Day holiday.
  • 3,000 to 4,000 metric tons of canola were sold to Japan on the spot cash market overnight.
  • Prices in the canola, western barley, and feed wheat futures were in Canadian dollars per metric ton.

Sources:

  • Resource News International via COMTEX
  • The Winnipeg Commodity Exchange (WCE)