Winnipeg Commodity Exchange Sees Sharp Gains in Canola Futures

The Winnipeg Commodity Exchange (WCE) saw a significant rally in canola futures on Tuesday, July 5, 2005, driven by gains in the Chicago Board of Trade (CBOT) soy complex and technical buying. The canola market advanced in response to the flooding in Manitoba, which affected 2.5 million acres, but this was largely offset by the strong canola crop in Saskatchewan. Over 80% of the crop was rated good to very good, according to the provincial agriculture department. The weak Canadian dollar and improved canola crush margins also contributed to the rally.

Key Takeaways:

• Canola futures at the Winnipeg Commodity Exchange (WCE) finished the session higher, driven by sharp gains in the Chicago Board of Trade (CBOT) soy complex.
• The canola market rallied strongly in active trade, with the July/Nov spread trading at C$3.50 to $5.00 and the Nov/Jan trading at $6.00 to $7.90.
• Intermonth spreading accounted for a small amount of the volume, with an estimated 1,166 contracts involved in the spread trade.
• The total volume estimated at 5,724 contracts, up from Monday's 2,335 contracts.
• Commodity funds were small buyers, covering their short positions, while line elevator companies sold due to farmer pricing as the market rallied.
• Feeder grain futures posted gains in light trade, supported by the firm tone in CBOT corn and crop land flooding in Manitoba.
• Western barley posted moderate gains in light trade, driven by aggressive end-user booking.

Statistics:

• 2.5 million acres affected by flooding in Manitoba.
• 80% of the canola crop in Saskatchewan rated good to very good.
• 1,166 contracts involved in the spread trade.
• Canola futures traded at C$3.50 to $5.00 for the July/Nov spread.
• Canola futures traded at $6.00 to $7.90 for the Nov/Jan spread.
• Total volume estimated at 5,724 contracts, up from 2,335 contracts on Monday.

Sources:

• Resource News International via COMTEX.
• Winnipeg Commodity Exchange.