ICE Canada Grain/Oilseed Rev: China Concerns Rattle Canola

Activity in canola was described as extremely volatile ahead of the weekend especially with the uncertainty surrounding Canada’s ability to export canola to China, brokers said.

News surfaced late on Thursday that China was considering implementing some strict import regulations on canola from Canada. Rumors also surfaced Thursday that a number of Canadian canola sales to China had been cancelled, although export sources later denied those reports.

The Canadian Food Inspection Agency was to hold a tele-conference with the Canadian grain industry Friday afternoon after the markets had closed in regards to the matter.

Canola had managed to find some early support from sentiment that the losses seen on Thursday were overdone and that an upward correction was needed, traders said. The buying back of previously sold positions had also provided some early strength for canola.

Support in canola had also come from the delays in finishing up harvest activities in western Canada and from the weakness in the Canadian dollar, brokers said.

Some of the advances in canola had also come from the strength displayed by CBOT soybean values. However, near the close, CBOT soybean values gave up some of its gains with some contracts closing lower. That helped to prompt the sell-off seen in canola. Weakness in CBOT soyoil futures throughout the day had been an undermining price influence on canola, brokers said.

The potential for lost Canadian canola sales to China also kept the advances in canola in check and in fact helped to take most contracts to lower ground at the close, brokers said.

Spreading of the Nov/Jan contracts was a minor feature of the trade in canola.

There were an estimated 17,943 canola contracts traded during Friday’s trade, down from 19,928 during the previous session.

Western barley futures were steady to lower with the two nearby contracts experiencing most of the price action. Weakness in CBOT corn futures helped to undermine barley values with light commercial offerings in the absence of buyers, accounting for the losses, brokers said.

An estimated 17 barley contracts changed hands during the session. On Thursday, 604 barley contracts were traded.