ICE Canada Review: Canola Down On Month-End Profit- Taking

After moving higher for most of the past month, participants were busy taking profits on Monday, with fund long-liquidation the feature, according to a trader. The selling pressure in canola was also encouraged by the losses posted in the Chicago soy complex. Some chart sell stops were likely hit on the way down in canola, although the market managed to find some support at the lows for day, tempering the declines.

Grain companies were also largely on the sell side, while declining crush margins were keeping the domestic processors to the sidelines, according to a trader.

The lack of any fresh weather-related concerns in western Canada also weighed on canola values, although this year’s production uncertainty did help limit the declines. Overall crop development remains highly variable. Some fields in southern Manitoba will likely be ready for swathing later this week, while fields in other parts of the Prairies are well behind normal and will need good weather going forward in order to make it, according to market participants.

Japanese export customers were buying on a scale-down basis, helping provide some underlying support for canola, according to traders.

About 10,409 contracts traded on Monday, which compares with Friday when an estimated 6,786 contracts traded. Spreading was only a small feature of the day’s trade, with most of the activity confined to the nearby November contract.

Western barley futures were untraded and unchanged on Monday.

Settlement prices are in Canadian dollars per metric ton.