ICE Canola Contracts Down as CBOT Soybeans Tumble

Brokers noted that testimony by Goldman Sach officials in front of a US Senate Commission Tuesday had market participants bailing out of risky investments including the Canadian dollar. Commodity funds were also seen bailing out of commodities, including CBOT soybeans.

"The losses in CBOT soybeans were weighing on canola contracts, but the pull-back in the value of the Canadian dollar, however, was keeping a firm floor under canola," a broker said.

Some of the early weakness in canola was associated with the declines seen overnight in Malaysian palm oil and European rapeseed futures.

Weather outlooks for the Canadian prairies calling for at least a couple of days of precipitation, was also viewed as an undermining price influence on canola, traders said.

Good planting progress was evident in western Canada and the moisture was seen benefiting recently seeded fields.

Sentiment that canola area in western Canada will surpass the 16.9 million acre projection made in Statistics Canada’s first crop acreage survey on Monday, also contributed to the bearish sentiment in the commodity.

The losses in canola, meanwhile, were being tempered by the weak Canadian dollar, with fresh demand from domestic crushers and exporters evident, traders said. Some of the exporter interest was said to be pricing old sales to Japan, but also fresh business.

There were an estimated 10,430 canola contracts traded at 10:50 CDT.

There were no western barley futures traded as of 10:50 CDT