ICE Canada Review: Canola Down On Profit Taking

The lost acres and weather damage across western Canada remained a supportive price influence for canola, as market participants continue to try and get a handle on the extent of the production declines, according to traders.

However, while the weather issues remain a concern, canola ran into stiff technical resistance to the upside, with the November contract hard-pressed to break above the C$430 per ton level on the charts. As a result, traders said profit-taking on overbought technical signals was behind some of the selling pressure.

Farmer selling was also believed to be picking up in the country, encouraging additional elevator hedges in the futures, according to a broker.

Routine exporter and domestic crusher pricing, as they take advantage of any downturns in the market, helped limit the losses in canola, said traders. A slightly weaker tone in the Canadian dollar was also supportive.

About 21,261 contracts traded on Thursday, which compares with Wednesday when an estimated 21,452 contracts traded. Intermonth spreading was a small feature on the day, as participants continue to roll their positions out of the nearby July contract.

Western barley futures were untraded and unchanged on Thursday, lacking any clear direction.

Prices are in Canadian dollars per metric ton.

Settlement