ICE Canola Futures Ease On Outside Market Declines

The losses in e-CBOT soybeans overnight as well as in Malaysian palm oil values helped to spur some selling in canola, brokers said.

Contributing to the downward price action were the lower calls for CBOT soybean and soyoil futures with the start of the North American day session.

Some of the selling in canola was also linked to ideas that prices were overbought and in need of a downward correction.

Weak technical signals, with the January contract running into resistance during Wednesday’s activity, was also viewed as an undermining price influence, brokers said.

Adding to the bearish price sentiment in canola will be the continued uncertainty about exports sales to China, traders said.

News that the US has officially stopped taking canola meal from five Canadian plants at the border over concerns about salmonella bacteria were also contributing to the bearish price sentiment in the commodity, traders said.

The US Food and Drug Administration has slapped import alerts on canola meal plants operated by Bunge Canada in Saskatchewan, Manitoba and Ontario, on Cargill in Saskatchewan and on Viterra in Manitoba.

The alerts put the plants on the USDA Red List, which allows inspectors to detain shipments because they appear to contain salmonella, "a poisonous or deleterious substance" that could be harmful to health.

Analysts said the salmonella issue could have a big impact on Canada’s canola sector, especially with crushing plants operating well below capacity.

Weakness in the Canadian dollar early Thursday was seen as a mild supportive price influence for canola.

As of 9:45 am EST, there were 1,222 canola contracts traded.

As of 9:45 am EST, no western barley contracts had been traded.