ICE Canada Review: Canola Drops On Strong C$, Harvest

Some position evening ahead of Tuesday’s USDA supply demand reports from the USDA and Wednesday’s closure of the ICE Canada trading platform for Remembrance Day was evident.

Aggressive selling by grain companies took canola futures down with some of that interest spurred on by the good harvest progress made during the weekend across the three prairie provinces, brokers said.

The strong Canadian dollar, which makes it more expensive to buy canola, helped to weigh on values.

Adding to the bearish price sentiment in canola was the uncertainty surrounding Canada’s ability to move canola to China after November 15 due to the implementation of blackleg restrictions. Talks between Chinese and Canadian government officials are continuing, but few details have been made available on the progress of those discussions, brokers said.

Some light chart-based liquidation orders also surfaced during the session that helped to undermine canola values.

The losses in canola, however, were limited in part by the sharp gains seen in CBOT soybean and soyoil futures. Some light domestic crusher demand and some short-covering ahead of the USDA reports Tuesday morning also provided some underlying support for canola, brokers said.

Spreading of the Jan/Mar contracts was a feature of the trade in canola and helped to augment the volume total.

There were an estimated 12,847 canola contracts traded during Monday’s trade, up from 8,660 during the previous session. Of the contracts traded, 2,064 were spread related.

Western barley futures were unchanged and untraded during the session. Some underlying support came from the gains posted by CBOT corn futures, brokers said.

No barley contracts changed hands during the session. On Friday, 63 barley contracts were traded.