ICE Canada Review: Canola Ends Down Following Soy

Ideal harvest weather across much of western Canada was allowing farmers to make good headway bringing in the canola crop, although some fields still need time to dry down. The increase of farmer deliveries into the commercial pipeline was accounting for much of the selling pressure, according to traders.

The strength in the Canadian dollar, which was up by nearly a cent relative to its US counterpart, also put some pressure on canola by cutting into crush margins and making the commodity less attractive to export customers, said traders.

Bearish technical signals added to the weaker tone in canola, as the sharp declines in soybeans triggered some speculative selling in canola as well. That selling built on itself as canola prices eventually broke below nearby support, said traders.

Scale-down exporter and domestic crusher pricing helped limit the declines in canola.

Statistics Canada will release its updated production estimates on Monday, October 4, and some positioning ahead of the report was a feature, said traders.

About 29,736 contracts traded on Friday, which compares with Thursday when an estimated 24,828 contracts changed hands. Spreading was a feature on Friday, accounting for 17,842 of the contracts traded. The spread trade was largely tied to commodity funds rolling out of the nearby November contract and into January.

Western barley futures were untraded on Friday. However, the December contract was revised slightly lower by ICE Futures Canada after the close.

Settlement prices are in Canadian dollars per metric ton.