ICE Canada Review: Canola Eases On C$/Improved Moisture

Heavy precipitation in the dry growing areas of Alberta and Saskatchewan during the weekend prompted some of the selling that took canola futures down, traders said. The soil moisture was seen alleviating the extremely dry conditions heading into spring seeding. As a result, participants removed some of the weather premium that had been built into canola values.

The Canadian dollar had started off Monday’s session on a weaker footing, but by the close of the ICE Canada trading platform Monday the currency was again moving towards parity with the US dollar and sparking some selling from a variety of market participants, brokers said.

The declines in canola were stimulated early by the sell-off seen in Malaysian palm oil futures overnight. The downward price slide seen in CBOT soyoil futures also encouraged selling in canola, brokers said.

Elevator company hedge selling was seen as light, but steady enough to undermine canola futures.

Record soybean supplies in Argentina and Brazil, the record amount of acres that are going to be planted to US soybeans and the record canola acreage expected in western Canada this spring also sparked the downward price slide seen in canola.

Underlying support in canola came from the pricing of old Japanese business by commercials and steady scale down buying by domestic crushers, traders said.

Most of the action seen in canola consisted of spreading, with fund accounts unloading May contracts and rolling into the July future.

There were an estimated 20,601 canola contracts traded Monday, up from 15,754 during the previous session. Of the contracts traded, 16,702 contracts were spread related.

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

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