ICE Review : Canola Drops With Crude Oil on Ceasefire Deal

WINNIPEG, Manitoba--The ICE Futures canola market was fell sharply lower on Wednesday as markets reacted to news of a tentative two-week ceasefire between the United States and Iran.

* Brent crude oil was down by 13 per cent late in the day at roughly US$95 per barrel.

* Reopening of the Strait of Hormuz was included as part of the ceasefire agreement, but Israeli attacks on Hezbollah in Lebanon saw Iran reclose the waterway in retaliation - leading to some uncertainty over how long the ceasefire may hold.

* Chicago soyoil, European rapeseed and Malaysian palm oil futures were all lower, contributing to the softer tone in canola.

* Chart-based speculative selling added to the softer tone in canola as the May contract broke below the lower end of its nearby trading range.

* However, historically wide crush margins of about C$350 per tonne above the nearby futures likely had end users buying on the way down.

* There were 99,898 contracts traded on Wednesday, which compares with Tuesday when 58,833 contracts changed hands.

Spreading accounted for 55,898 of the contracts traded.

Settlement prices in Canadian dollars per metric tonne.

 
           Price      Change 
May       704.90    dn 14.50 
Jul       718.10    dn 14.70 
Nov       714.80    dn 12.80 
Jan       721.50    dn 12.70 

Spread trade prices are in Canadian dollars and the volume represents the number of spreads:

 
Months    Prices                            Volume 
May/Jul   12.60 under to 13.60 under        19,186 
May/Nov   6.80 under to 11.00 under            359 
Jul/Nov   5.90 over to 2.40 over             7,139 
Jul/Jan   2.90 under to 4.10 under             153 
Jul/Mar   7.90 under to 9.30 under               7 
Nov/Jan   6.30 under to 7.00 under           1,007 
Jan/Mar   4.50 under to 5.30 under              88 
Mar/May   1.10 under to 1.60 under              10 
 

Source: Commodity News Service Canada, [e-mail]

(END) Dow Jones Newswires

04-08-26 1529ET