By Dwayne Klassen, Commodity News Service Canada Inc.

Winnipeg – July 17/12 – Canola futures on the ICE Canada trading platform ended Tuesday’s session on the defensive with the taking of profits and the declines posted in the outside oilseed markets generating much of the downward price slide, industry watchers said.

Sentiment that canola futures were overbought and in need of a downward correction after recent sharp advances helped to weigh on prices.

Much of the outside oilseed weakness reflected the declines seen overnight in Malaysian palm oil and European rapeseed futures, traders said. Losses in CBOT soybean and soyoil values also contributed to the price declines in canola.

Favourable weather for the development of the canola crops in western Canada encouraged some of the price weakness as did a late day upturn in the value of the Canadian dollar, brokers said.

Steady farmer selling of canola into the cash pipeline further undermined values. Much of that selling was linked to firmness in the cash market and to the need to empty out bins of old crop canola supplies.

A drop off in domestic crusher demand also helped to weigh on values, traders said.

Some underlying support in canola came from light commercial demand, believed to be pricing routine export business to Japan. The hot and dry weather conditions that continue to grip the main soybean growing regions of the US also restricted the downward price slide in canola, brokers said.

There were an estimated 8,944 canola contracts traded Tuesday, down from the 14,433 contracts that changed hands during the previous session. Of the contracts traded, 2,730 were spread related.

There were no durum or milling wheat contracts traded during the session, however, there were 12 December barley contracts traded between commercials at higher values.

Prices are in Canadian dollars per metric ton.