ICE Canada Review: Canola Retreats From Early Highs

Commission house and speculative fund buying accounted for some early strength in canola, taking prices to new highs, according to traders. However, the market ran into chart-based resistance and the speculators turned around and started taking profits. Thin outright volumes were likely exaggerating the price moves in canola, as the majority of the activity was confined to spreading, said a broker. Some farmer selling was also triggered by the initial move higher, adding to the declines.

Losses in Chicago soybeans were a catalyst for the declines in canola, eventually pulling the Canadian market down as well.

A stronger Canadian dollar also put some pressure on canola, causing crush margins to deteriorate slightly.

However, routine exporter and domestic crusher pricing did provide some support, limiting the downside.

The USDA releases updated supply/demand reports on Wednesday, and some positioning ahead of the data was a feature.

About 16,579 contracts were traded on Tuesday, which compares with Monday when an estimated 17,507 contracts changed hands. Spreading was a feature, accounting for 10,032 of the contracts traded.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.