ICE Canada on the Defensive with Farmer Selling

Market watchers said when the market begins to fall like canola has over the past two sessions, producers begin to panic a little, and start selling before prices decline too much farther.

There was still some speculative fund long liquidation in the market, which added to the bearish tone, brokers said.

Adding to the declines was the Australian crop report, which showed even though the nation has been hard by excess precipitation during the growing season, the nation will still have its largest harvest since the 2003/04 crop year. Canola production is expected to increase by 11 per cent from one year ago, at 2.1 million tons.

Weakness in CBOT soybeans, Malaysian palmoil, and European rapeseed added to the weaker prices, as did a stronger Canadian dollar, experts said.

However, canola has rebounded from session lows, with long liquidation beginning to exit the market, brokers said. Fund selling has been the main factor behind canola’s declines over the past two sessions.

Scaled down demand from the crushing sector was also restricting losses, market watchers said.

At 10:45 CST, there had been about 19,000 canola contracts traded, with about 13,000 of those tied to spreading.

Western barley futures were unchanged and untraded at midsession.

Prices in Canadian dollars per metric ton at 10:45 CST: