By Dwayne Klassen, Commodity News Service Canada

Winnipeg – October 10/12 – Canola futures on the ICE Canada trading platform finished Wednesday’s session on the defensive with the liquidation of positions ahead of USDA production reports scheduled for release Thursday morning associated with the downward slide in values, market watchers said.

Ideas that US soybean production could be higher than first anticipated in the USDA report, also helped to generate some of the downward price action.

Adding to the bearish sentiment in canola were the losses experienced by CBOT soybean and soyoil values. The declines in canola were also fueled by ideas that the commodity has become overpriced in comparison to other alternative oilseeds, brokers said.

A drop off in demand from the domestic processing sector helped to weigh on canola, with crush margins said to be very unprofitable at the moment, traders said.

Chart-based liquidation orders contributed to the price weakness with general firmness of the Canadian dollar also an undermining price influence.

The declines in canola were offset in part by the pricing of old export business to Japan at the lows vby commercial accounts. Concerns regarding the tight ending stocks picture for canola in Canada also slowed the price drop, brokers said.

The rolling of positions from the November future to the January contract continued to be a small feature of the activity in canola and helped to augment the volume total.

There were an estimated 14,110 canola contracts traded Wednesday, down from the 17,847 contracts that changed hands during the previous session. Of the contracts traded, 8,614 were spread related.

There were no milling wheat contracts traded although values were increased by ICE Canada at the close.

Durum and barley contracts were untraded and unchanged.

Prices are in Canadian dollars per metric ton.