ICE Canada Review: Canola Follows CBOT Soybeans Down

Positioning ahead of the weekend was a feature of the activity with spreading helping to augment the volume total in canola.

Additional weakness in canola was encouraged by the liquidation of long canola positions by nervous speculative fund accounts, traders said. Some of that selling was linked to chart signals as well as to news overnight that China’s central bank will raise the reserve requirement ratio for banks by 0.50 percentage point beginning on November 29. The move could curb China’s interest in purchasing commodities from the US and Canada.

A drop off in export demand contributed to the bearish price atmosphere in canola as did some profit-taking by a variety of market participants, brokers said.

Firmness in the Canadian dollar also was an undermining price influence.

Some pre-weekend hedging by grain companies adding to the downward price slide.

The losses in canola were restricted in part by steady domestic crusher demand under the market and by the pricing of old export business by commercial accounts.

There were an estimated 17,970 canola contracts traded Friday, up from the 11,570 contracts that changed hands during the previous session. Of the contracts traded, 7,416 were spread related.

The nearby western barley future saw some activity Friday with the unloading of positions by commercial accounts the main feature, brokers said. There were 33 western barley contracts that changed hands on Friday. No western barley contracts traded on Thursday.