ICE Canada Grain/Oilseed Review: Canola Down on Strong C$

Some of the activity seen in canola throughout the session was said to be the evening up of positions ahead of the weekend.

Much of the downward price action seen in canola throughout the session came from the strong Canadian dollar, traders said. They noted the dollar’s climb has significantly slowed down demand for canola from both the domestic and export sectors.

Weekly trade figures from the Canadian Oilseed Processors Association showed that Canadian crushers were only working at 63% of their capacity during the week ended May 27, compared to almost 86% the previous week. At the same time a year ago, Canadian processors were working at 92.7% of their capacity.

Some of the price declines in canola were also tied to sentiment that canola acres in western Canada will be much higher than what the acreage survey from Stats Canada suggested in April. The government agency is scheduled to release an updated acreage survey on June 23, 2009.

The losses in canola were trimmed by the slow pace of farmer deliveries into the cash market and the pricing of routine export sales to Mexico and Japan.

The gains in CBOT soybean futures and the late upturn in CBOT soyoil values also helped to limit the price weakness in canola, brokers said.

Spreading was a feature of the activity and helped to bolster the volume total. Market participants noted that some of that activity featured the rolling out of the July position and into the November contract by index funds.

There were an estimated 15,974 canola contracts traded during Friday’s session, up from 10,877 during the previous session.

Western barley futures suffered some late declines with the July and October contracts experiencing the only volume total. Light commercial liquidation orders in the absence of any fresh demand, allowed prices to be pushed downwards, brokers said.

An estimated 1,123 barley contracts changed hands during the session. On Thursday, 1.114 barley contracts were traded.