Futures and Commodity Market News

Mon May 12, 2008

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Winnipeg, May 08, 2008 (Resource News International via COMTEX) -- RNI ICE Futures Canada (ICE) grain and oilseed futures closed Thursday's session higher with canola lifted by speculative buying on technical signals and on the need to build a weather premium into the market, brokers said.

Canola volume was moderate with intermonth spreading accounting for almost half the activity. Commercials and speculative trade was noted in the spreads with speculators felt to be liquidating their positions at a loss as the July/Nov spread narrowed in to C$13.50. "These guys (speculators) put the (July/Nov) spread on at C$20.00 and started liquidating at C$15.00," said a trader.

The total canola volume was estimated at 9,042 contracts, up from 5,033 contracts on Wednesday, including an estimated 4,328 contracts involved in the spread trade.

Canola prices were mixed in overnight trade amid a lack of interest. Prices started to firm as the North American trading session got underway in the wake of gains in Chicago Board of Trade soy complex futures. Canola extended its gains and outperformed the US soy market closing moderately higher.

Canola was supported by talk of the need to build a weather premium into canola futures as the late canola plantings raise the specter of frost hitting the crop at harvest time. Friendly technical signals and the weak Canadian dollar contributed to the gains with slow selling also a friendly factor. The continued poor canola export pace, late declines in CBOT soybean futures and a weakening in crush margins capped the canola advance, analysts said.

Crushers were steady buyers with speculators the best buyers. Commission house buy orders were triggered by the rally with commodity fund buying also noted. Traders estimate fund buying at about 500 July contracts. The selling was comprised of commission house long liquidation and elevator company scale up offerings.

Western barley futures finished steady to higher in light trade. The firm tone in CBOT corn and the lack of selling gave modest support, brokers said. There was little fresh news to give the market direction with cash bids continuing to trade near record high levels.

The total barley volume was estimated at 459 contracts, up from 42 contracts on Wednesday, including an estimated 212 contracts involved in the spread activity

     Prices are in Canadian dollars per metric ton:
            Settlement   Change
                 Prices
Canola
               July    611.40  up 9.70
     Nov     628.10      up 7.90
Jan     637.80      up 8.00
Western barley
July     247.90      unch
Oct      257.00      up 2.00
     Spread trade prices are in Can dollars and the volume represents the number of
spreads:
                                   Months         Prices              Volume
Canola
                                        July/Nov       13.50-18.30              2,125
                                   July/Jan       26.10               26
                                        Nov/Jan        9.80-10.90               10
                                   Mar/May        5.10                3
Barley
July/Oct       6.90-9.00                106

Don Bousquet, Resource News International

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