ICE Canada Review: Canola Limit Down On CBOT Sell-Off

Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session on the defensive with some months settling down the C$30.00 per metric ton daily limit. The limit down declines seen in CBOT soybean and soyoil values encouraged the price weakness in canola as did liquidation orders from a variety of market participants, industry watchers said.

Canola had posted sharp declines in overnight activity in reaction to the sell-off seen in e-CBOT soybean and soyoil. The sharply lower calls for CBOT soybean and soyoil values with the start of the North American day session had helped to undermine canola overnight.

The limit down price declines seen in CBOT soybeans and soyoil helped to trigger sell-stops in canola, which amplified the price weakness, brokers said.

Chart related liquidation orders from speculative longs, locals, commission houses, and commodity fund accounts further weighed on canola futures, brokers said.

Domestic crushers also backed away from the market, which allowed canola values to quickly move to lower ground. Elevator company hedge selling, tied to panic selling by producers, also weighed heavily on canola futures.

Some of the buying in canola came from scale down exporter pricing of old business.

Spreading was a big part of the volume total seen in canola Tuesday.

There were an estimated 27,471 canola contracts traded Tuesday, up from the 22,797 contracts that changed hands during the previous session. Of the contracts traded, 18,448 were spread related.

Western barley futures were untraded Tuesday with no contracts changing hands