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WCE close: Canola falls on strong loonie

(Resource News International) Winnipeg Commodity Exchange (WCE) grain and
oilseed futures closed Thursday’s session mixed with canola pressured to small losses by
the strong Canadian dollar in a “whippy” trade, brokers said.

Canola activity was heavy with intermonth spreading described as moderate.

The total canola volume was estimated at 12,499 contracts, down modestly from
Wednesday’s 12,996 contracts, including an estimated 1,766 contracts that were involved
in the spread trade. Canola options trade comprised of 500 November 430 calls and 375 November
430 puts.

Canola prices were pressured to small losses by the strong Canadian dollar, which
moved to a premium to the U.S. dollar for the first time in 31 years on Thursday. Also
weighing the market was the absence of fresh export demand as the strong dollar and
record-high ocean freight rates have caused buyers to move to the sidelines, said
exporters.

Also contributing to the weak tone was increased hedge selling as farmers took
advantage of unusually strong farmgate cash bids to deliver, said cash dealers.

Underpinning the market was the strength of Chicago Board of Trade (CBOT) soy complex
futures, bullish technical signals and rain delays in the Alberta harvest.

Crushers were the best buyers with only light routine exporter pricing noted.
Commodity funds were buyers today along with commission houses as funds were
estimated to have bought about 1,000 November contracts. Their total long position is
estimated at 17,000 contracts.

The selling was mainly elevator company hedging with some profit taking also
noted. Analysts indicated that funds did liquidate about 500 long Nov positions.

Western barley prices were mainly lower in moderate trade. Bullish technical
signals prompted heavy speculative buying.

However, pressuring the market down to losses was heavy elevator company
hedging as farmers took advantage of near historically-high barley prices to deliver, cash
dealers said. Profit taking was also evident in the selling. The firm Canadian dollar was
also bearish as it makes U.S. corn imports cheaper, said traders.

The total barley trade was estimated at 1,423 contracts, down from 2,637 contracts
on Wednesday. Some light December/March spreading was noted.

Feed wheat futures ended mixed with the tone firm in the wake of the modest
gains in U.S. wheat markets. Trade was described as “dull” by analysts. The total volume
was estimated at 185 contracts, up from Wednesday’s 74 contracts.

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