ICE Canada Review: Canola Eases On CBOT Weakness/C$ Surge

Activity was described as choppy with spreading helping to augment the canola volume. Some evening up of positions ahead of Friday’s latest round of supply/demand balance sheets from the USDA was a feature of the trade.

Early selling in canola was inspired by the declines posted overnight in Malaysian palm oil futures. The weakness displayed by CBOT soybean and soyoil values also stimulated the declines posted by canola, traders said.

The late upturn in the value of the Canadian dollar was also viewed as an undermining price influence. The Canadian unit had eased significantly in early morning activity which in turn had sparked some fresh buying interest from the domestic processing sector. The weaker Canadian dollar had improved crush margin profitability.

However, as the session progressed and as the Canadian dollar climbed in value, the buying interest from domestic crushers also began to wane, allowing the sell orders hitting the commodity to amplify the declines, traders said.

Weakness in canola was also linked to light, but steady hedge selling by grain companies.

The incredibly large global oilseed supply situation was also viewed as an undermining price influence on canola futures, brokers said.

The expectation of record large canola plantings this spring in western Canada also sparked some of the downward price action.

Good commercial demand, believed to be pricing old export business to Japan, helped to restrict the price weakness seen in canola.

There were an estimated 13,621 canola contracts traded Thursday, down from 18,875 during the previous session. Of the contracts traded, 10,200 contracts were spread related.

Western barley futures were unchanged and untraded in non-existent activity.

No barley contracts changed hands during the session. On Wednesday, no barley contracts were traded.