ICE Canada Review: Canola Down As Buyers Back Away

Spillover from the declines in the Chicago soy complex accounted for some of weakness in canola, according to a broker, with fund liquidation an ongoing feature in the market.

Overnight losses in Malaysian palm oil and the weaker tone in the equity markets also accounted for some of the declines in canola, with concerns about the economic situation in Europe and the instability in the Korean peninsula leading to a general reduction in risk appetite across the board, according to a broker. He said reports out of China that the country was making changes to its margin requirements on grains and oilseeds were also behind some of the weakness in canola.

The Canadian dollar was sharply weaker on Friday, which would normally be supportive for canola. However, the currency did little to temper the declines in canola on Friday, with canola actually losing ground to soybeans when the exchange rates were factored in, said a broker.

Exporter and domestic crusher pricing helped limit the losses in canola, but any buying was relatively lackluster on Friday, said market participants.

About 9,970 contracts traded on Friday, which compares with Thursday when an estimated 9,483 contracts changed hands. Spreading was a feature, accounting for 5,666 of the contracts traded.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.