ICE Canada Review: Overbought Ideas Undermine Canola

The defensive tone also was linked to the continued strong deliveries of canola into the cash pipeline by producers, which in turn sparked some aggressive hedge selling by grain companies, brokers said. The favourable weather conditions for harvest operations resulted in the heavy farmer selling.

Some bearish sentiment in canola was also linked to ideas that canola yields in harvested areas were much higher than anticipated, brokers said.

Profit-taking ahead of the weekend helped to undermine canola futures as did the late downturn in CBOT soybean values, traders said. Weakness in CBOT soyoil had also encouraged some price declines earlier in the day in canola.

Canola had found early support from the advances posted by Malaysian palm oil and European rapeseed futures overnight. Strong demand from the domestic processing sector had also influenced some of the upward price action experienced by canola for a portion of the day, brokers said.

Rumours of fresh export business for Canadian canola also generated some early strength for the commodity. However, confirmation of any business was not available.

The pull-back in the value of the Canadian dollar Friday was also considered an underpinning price influence.

Good volume totals were again seen in canola with a number of market players continuing to roll positions out of the nearby November canola contract and into the January future. Some evening up of positions ahead of the weekend was also a feature of the activity.

There were an estimated 32,869 canola contracts traded Friday, up from the 21,275 contracts that changed hands during the previous session.

Western barley futures were unchanged and untraded Friday. On Thursday no western barley contracts were traded.