ICE Canola Weaker As Bearish Price Influences Add Up

"Canola just can’t seem to catch a break," said a canola broker. He said the strike by CN Rail engineers over the weekend added to the already bearish canola market, making it difficult for both exporters and domestic processors to move the commodity. While market participants were hopeful that government back-to- work legislation would end the strike quickly, any delays in movement now could lead to larger canola supplies going forward.

In addition, traders anticipate an upward revision to Statistics Canada’s canola production estimate when the government agency releases its latest report on December 3. The broker noted that average trade guesses were for an 11.0 million metric ton crop, which would be well above the 10.269 million tons forecast by Statistics Canada in October.

While speculative buying did help canola move higher earlier in the session, the market was unable to hold above the C$411 per metric ton level in the January contract. The broker said there was "a wall of farmer selling above the market," which was limiting any advances.

The Canadian dollar was stronger on Monday, adding to the weaker tone in canola, said traders.

Light exporter and domestic crusher pricing provided some support, limiting the downside. The firmer tone in CBOT soybeans also provided some spillover support for canola, according to the broker.

At 10:58 CST, about 7,900 canola contracts had changed hands, with the January/March spread a minor feature of the activity.

Western barley futures were steady to higher, with only 5 contracts traded by midday.

Prices in Canadian dollars per metric ton at 10:58 CST: