ICE Canada Grain/Oilseed Review: Canola Follows Soybeans Down

Canola futures moved sharply lower early in the session undermined by the higher than anticipated production estimate for both US and world soybeans from the USDA in a supply/demand update. Increased ending stock estimates contributed to the selling interest in canola.

Declines in canola were also linked with chart-based liquidation orders with the triggering of sell-stop orders on the way down amplifying the price slide.

The lack of fresh export demand contributed to the weakness in canola as did the good weather conditions for the development of the South American soybean crop, brokers said.

Losses in global crude oil futures also sparked some of the downward price momentum in canola.

The losses in canola, however, were tempered and values managed to move off their lows in response to aggressive exporter pricing, traders said. Much of the pricing was said to be covering old Japanese business.

The buying back of previously sold positions also helped to ease the price slide in canola as did a drop off in farmer selling, with cash bids by elevator companies now very unattractive, brokers said.

There were an estimated 12,683 canola contracts traded during Tuesday’s trade, up fractionally from 12,587 during the previous session. Of the contracts traded, 1,528 were spread related.

Western barley futures were steady to narrowly mixed in extremely choppy activity. Light commercial demand, believed to be covering some minor end-user needs, helped to lift the nearby March future. The limit down losses in CBOT corn futures tempered the upside price potential, brokers said.

An estimated 20 barley contract changed hands during the session. On Monday, 201 barley contracts were traded