WINNIPEG, Manitoba--ICE canola futures posted solid gains during the week ended Oct. 27, hitting fresh contract highs in many months as speculators added to their net long positions.
"The specs have canola by the throat, and they'll see how far they can run it," said Ken Ball of PI Financial in Winnipeg.
He said the relatively small size of the canola market means that a few larger players can easily move prices where they want. Those speculators are currently heavily long and while they will eventually take profits, the trigger for that profit-taking remains to be seen.
"There's no economic rationale for canola to be at these prices, but they'll keep pushing it as long as they can get away with it," said Ball.
"The longs have all the power," said Ball. He noted that the speculators on the long side only have to put up money, while the shorts have to put up actual canola "and that's a whole different game in a tight market like this."
He said commercials on the short side of the canola futures may eventually deliver on the futures and take a profit if that makes more sense for their bottom line than selling on the export market.
Source: Commodity News Service Canada, news@marketsfarm.com
(END) Dow Jones Newswires
10-27-21 1659ET
