Winnipeg Commodity Exchange canola futures reached new contract highs on Friday after US soya futures soared, but the market later retraced gains on commercial hedges, traders said. "(There was) tremendous short covering in the market, taken over by great, great farmer selling," a trader said.
Canola ended $6.40 to $13.10 per tonne higher, with July up $6.40 at $375.30, November up $8.60 at $404.20 and January up $8.70 at $412.70. The market surged at the open after Chicago Board of Trade soya futures moved up their daily limit on a bullish US Agriculture Department plantings forecast.
July soyabean oil ended 1.06 US cent per lb higher at 36.63 US cents and July soyabeans settled 40-1/4 US cents per bushel higher at US $8.50. Short covering by commission houses, small speculators and commercials accounted for most of the strength in canola, traders said.
November canola futures briefly touched a high of $425.60 per tonne - up $30, the contract's daily limit. The contract's previous high had been $413.50 per tonne set on June 5. But canola fell to session lows at the close as farmer hedges poured in, traders said.
Funds were seen as light buyers, traders said. Crushers sold the market early and bought it back later, traders said. An estimated 674 July/November spreads traded from $18.70 to $22 with 1,071 November/January from $7.90 to $9, 290 November/November from $14.90 to $19.80 and 136 November/March from $14 to $15.10. Canola volume was an estimated 24,600 contracts, up from a total of 8,965 on Thursday.
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