ICE Canada Review: Canola Consolidates Slightly Lower

Canola initially saw some follow-through strength on its recent gains, but the buying interest subsided and profit-taking came forward to take prices below unchanged in most months. Overbought technical signals encouraged the downward move, with speculators taking profits on some of their recent long positions, said a trader.

The strong Canadian dollar also weighed on canola values, as the firmer currency cuts into crush margins and causes end users to back away from the market, according to market participants.

However, demand remains strong for canola and the commercial buying was still there on a scale-down basis, said a trader. He said the general technical uptrend also remains intact.

In addition, farmers were reluctant sellers on any moves lower, as they already moved quite a bit of canola at harvest time and are now generally content to hold out for higher prices.

About 20,660 contracts traded on Thursday, which compares with Wednesday when an estimated 27,221 contracts changed hands. Spreading accounted for about 9,034 of the contracts traded.

Western barley futures were untraded and unchanged on Thursday.

Settlement prices are in Canadian dollars per metric ton.