ICE Canada Review: Canola Down Following Soybeans, Profit-Taking

A downturn in Chicago soybeans helped encourage the weakness in canola, with some sell-stops hit on the way down as the losses appeared to be building on themselves, according to a trader.

The need for a technical correction following recent gains in canola also accounted for some of the selling pressure, as the November contract ran into resistance at the key C$460 per metric ton level in overnight trade, said a broker.

Improving US crop conditions were putting some spillover pressure on canola as well, although there was still enough uncertainty with Canada’s crop to keep values well supported. A broker noted that the weather uncertainty continued to limit the farmer selling in the market, as they wait to see just how large their crops will be this year.

The hot, dry weather causing problems for the European rapeseed crop also helped underpin canola, according to traders.

Ideas that the profit-taking correction was looking a little overdone also limited the losses, helping canola prices move off their session lows by the close.

The Canadian dollar was trading within a narrow range on Monday, providing little direction for canola.

About 10,548 contracts traded on Monday, which compares with Friday when an estimated 9,382 contracts traded. Spreading accounted for about 560 of the contracts traded.

Western barley futures were untraded and unchanged on Monday

Settlement prices are in Canadian dollars per metric ton.