ICE Canola Contracts Drop On CBOT Soy Losses

By Dwayne Klassen, Commodity News Service Canada Inc

Winnipeg – January 12/12 – Canola contracts on the ICE Futures Canada platform were trading at weaker price levels at midday Thursday. A bearishly construed USDA soybean report for US soybeans encouraged much of the downward price action seen in canola, market watchers said.

Aggressive selling in canola came from a wide variety of market participants as the USDA unexpectedly raised 2011 US soybean output and subsequently US soybean supplies, traders said.

The bearish sentiment in canola was augmented by the continued beneficial moisture falling across the soybean growing regions of Brazil and Argentina, brokers said.

Commercial related liquidation orders helped to amplify the price declines experienced in canola. Sell-stops were triggered on the way down, exaggerating the price losses in canola early in the session, traders said.

The losses in canola were restricted when exporters stepped up to the plate and began pricing both old and new business, traders said. Scale down domestic crusher demand also helped to temper the price slide to lower territory.

Hedge selling by grain companies also eased up Thursday morning, which provided some underlying support to canola values, brokers said.

There were an estimated 13,341 canola contracts traded at 10:42 CST. Of the contracts traded, 4,626 were spread related.

There were no western barley futures traded as of 10:42 CST.

Prices in Canadian dollars per metric ton at 10:42 CST: