ICE Canada Review: Canola Edges Lower, Fund Selling Weighs

While early declines in Chicago soybeans had weighed on canola, the eventual move higher in the US futures provided some spillover support as well, leading to some choppy trade in the Canadian market.

Talk of fresh export demand also helped underpin the canola market, as the end users worked to cover those new sales. Steady domestic crusher pricing also remained supportive, according to traders.

A weaker tone in the Canadian dollar, which was down by three quarters of a cent relative to its US counterpart by the close, helped prop up canola as well.

However, once the exporter pricing was covered, speculative long liquidation remained the dominant feature in canola, according to a broker. He said the fund selling limited the upside potential and kept most months pointed lower as speculators were still taking profits on their large long positions.

Declines in the outside equity markets were also bearish for canola, according to traders.

About 11,876 contracts traded on Tuesday, which compares with Monday when an estimated 8,085 contracts changed hands. Spreading was a feature, accounting for 4,836 of the contracts traded.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.