ICE Canada Grain/Oilseed Review: Late Sell-Off Takes Canola Down

Canola prices moved lower near the close with late day elevator company hedge selling weighing heavily on prices. Profit-taking by a variety of market participants also contributed to the downward price slide.

"Canola was just hammered downwards at the close," was how one broker described the late sell-off.

Some of the selling in the market was also associated with ideas that the recent export business with Pakistan and Mexico had been covered, traders said.

Reports that supplies of canola in the cash pipeline were no longer as tight as they once were, also was an undermining price influence, brokers said.

Steady commercial demand had provided a firm floor for canola earlier in the day with some of that interest tied to the recent fresh export demand with Pakistan and Mexico, traders said. Steady demand from domestic processors contributed to the upward price movement seen in canola. Brokers noted that crush margins for processors in Canada were at the most profitable level they have been in quite some time.

The buying back of short positions ahead of the weekend had also generated some underlying support for canola.

Declines in some CBOT soybean contracts and the losses posted by CBOT soyoil during the North American day session also had weighed on canola. However, when both soybeans and soyoil turned higher near the close, some spillover support was evident.

The losses in the deferred canola futures were tempered by talk that acreage to the crop this spring will be reduced from earlier expectations, brokers said

There were an estimated 14,569 canola contracts traded during Friday’s session, down from 27,185 during the previous session. Of the contracts traded Friday, 10,500 were spread related.

The two nearby western barley futures were lower. Early declines in CBOT corn futures and a drop off in demand by end-users in western Canada helped to take the May and July contracts down, brokers said. Commercials were the featured sellers with the lack of willing buyers amplifying the downward price slide.

An estimated 180 barley contracts changed hands during the session. On Thursday, 188 barley contracts were traded. Of the contracts traded Friday, 126 were spread related.

Prices are in Canadian dollars per metric ton.