ICE Canada Review: Canola Eases On Spec Selling

Much of the speculative activity in canola was said to have been the establishment of fresh short positions, brokers said.

Some position evening ahead of the weekend and in view of the US markets being closed on Monday, was a feature of the activity. The CBOT will be closed on January 18 in observance of Martin Luther King Jr., Day.

Contributing to the price weakness in canola were the losses in CBOT soybean futures and the significant downward price move by CBOT soyoil values, traders said.

The losses in canola were also a function of bearish chart signals and the continued absence of fresh export demand.

Reduced demand from domestic processors due to unfavourable profit margins also prompted some light selling.

Losses overnight in Malaysian palm oil helped to spark some early selling interest in canola.

The losses in canola were tempered by the reluctance of western Canadian producers to deliver canola into the cash pipeline. Light commercial demand, said to be covering old export business to Japan, also was an underpinning price influence, brokers said.

The pull-back in the value of the Canadian dollar also helped to generate some minor support in canola.

Spreading was a feature of the activity and helped to bolster the volume total.

There were an estimated 7,581 canola contracts traded during Friday’s trade, down from 14,372 during the previous session. Of the contracts traded, 1,922 were spread related.

Western barley futures were mainly higher with light commercial demand in the absence of willing sellers allowing the nearby March future to move up, traders said. The weakness in CBOT corn futures limited the upside price potential in barley.

An estimated 5 barley contract changed hands during the session. On Thursday, 129 barley contracts were traded.