By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Jan. 26 (MarketsFarm) – The ICE Futures canola market was stronger at midday Tuesday, but well off the limit-up gains posted earlier in the session.
The most active March contract was up by its C$30 per tonne daily limit at one point, moving above C$700 per tonne in the front month for the first time since 2008.
“It feels like a squeeze situation… like some massive short-covering has come in,” said a trader. He added that farmers have already been active sellers and now “the cupboard is bare.” As a result, end users sitting on short positions are being forced to buy them back.
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Meanwhile, speculators are still holding large long positions and the early gains brought in some long-liquidation on the other side, taking prices off of their highs, according to the trader.
The Chicago Board of Trade soy complex was also stronger, but canola was pacing that market to the upside.
About 23,800 canola contracts traded as of 10:40 CST.
Prices in Canadian dollars per metric tonne at 10:40 CST:
Price Change
Canola Mar 692.70 up 17.00
May 662.50 up 8.50
Jul 643.50 up 6.60
Nov 556.50 up 5.30
