ICE Canada Review: Canola Edges Down In Thin Holiday Trade

Buyers and sellers were both reluctant to push values too far
one way or the other on Monday with the US markets shut down, according to a trader who added that he couldn’t remember the last time volumes were so small.

Some light hedge selling was being met by routine end-user demand, according to market participants. Small scale speculative activity was also a feature on both sides of the market.

A stronger tone in the Canadian dollar, which was up by about a quarter of a cent, weighed slightly on canola, keeping the bias to the downside for the most part. A firmer currency cuts into crush margins and also makes canola less attractive to export customers.

Expectations for declines in the US soy complex when trade resumes there after the holiday also put some spillover pressure on canola, according to a trader.

However, canola is still bullish overall in the long term, with any declines are generally seen as buying opportunities given the tight supply situation. Overnight advances in Malaysian palm oil and European rapeseed futures also lent some underlying support to the market, said traders.

About 2,350 contracts were traded on Monday, which compares with Friday when an estimated 10,696 contracts changed hands. Spreading accounted for about 966 of the contracts traded.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.