ICE Canada Review: Canola Eases As CBOT Declines

Losses overnight in Malaysian palm oil futures contributed to the early weakness in canola with the absence of fresh export business being put on the books also viewed as an undermining price influence, traders said.

Steady elevator company hedge selling, as producers continue to panic and move canola into the cash pipeline, also contributed to the bearish price atmosphere.

Nervous liquidation by speculative accounts, some of which was tied to the political unrest in the Middle East and North Africa, also weighed heavily on canola futures, brokers said. Some chart-related liquidation was also evident and helped to undermine canola.

The uptrend in the value of the Canadian dollar Thursday also encouraged some of the price weakness in canola.

The downward price slide seen in canola was tempered in part by good domestic processor demand at the lows and by the pricing of old export business to Japan by commercial accounts, traders said.

The ability of CBOT soybeans and soyoil to move off their lows of the day also encouraged the losses in canola to be tempered, brokers said.

Activity was described as extremely volatile with much of the volume total tied to spreading by commodity fund accounts.

There were an estimated 24,721 canola contracts traded Thursday, down from the 32,126 contracts that changed hands during the previous session. Of the contracts traded, 19,298 were spread related.

Western barley futures were untraded Thursday with no contracts changing hands.