Winnipeg Commodity Exchange Sees Rally in Grain and Oilseed Futures

Strategic Insights -

The Winnipeg Commodity Exchange (WCE) saw a rally in grain and oilseed futures on Monday, with canola leading the charge. The increase was attributed to fairly aggressive buying from commodity fund accounts, which were attempting to cover their short position in the May canola future. However, the gains in canola were tempered by scale-up commercial selling, which was said to be hedge related. The dryness concerns in South America also contributed to the strength in grain futures, with some minor domestic crusher demand evident. The Canadian dollar's strength and the absence of fresh export demand further limited the upside price potential in canola.

Key Takeaways:

  • Canola futures at the WCE were higher, driven by aggressive buying from commodity fund accounts, which were attempting to cover their short position in the May canola future.
  • The gains in canola were tempered by scale-up commercial selling, said to be hedge related, and the absence of fresh export demand.
  • Dryness concerns in South America contributed to the strength in grain futures, with some minor domestic crusher demand evident.
  • The Canadian dollar's strength limited the upside price potential in canola, and the absence of fresh export demand also played a role in limiting prices.
  • Commodity funds were still sitting on a sizeable short position in the May canola future prior to the open on Monday.
  • The gains in canola were linked to the rally in Chicago Board of Trade grain and soybean values.
  • Western barley and feed wheat futures were steady to slightly higher, with strength in both commodities attributed to light commission-house short-covering.
  • The gains in these commodities were limited by large supplies and the absence of fresh end-user demand.
  • A downturn in CBOT corn futures also trimmed some of the advances, particularly in barley.

Statistics:

  • Estimated volume in Winnipeg Commodity Exchange grain and oilseed futures was pegged at 4,382 contracts.
  • Trading volume in western barley at midsession stood at 405 contracts.
  • Trading volume in feed wheat at midsession was estimated at 301 contracts.
  • Prices in Canadian dollars per metric ton at 10:32 a.m. CST (1632 GMT) were reported.

Sources:

  • (ODJ via COMTEX)
  • (Dow Jones Newswires)
  • COMTEX (http://www.comtexnews.com)
  • (204)-947-1700, resnews@compuserve.com (email contact for Dwayne Klassen)