ICE Canada Review: CBOT Soy Losses Undermine Canola

The losses in canola were tempered by good commercial demand under the market.

Most of the selling interest that surfaced in canola was triggered by the sharp losses seen in both CBOT soybeans and soyoil, traders said. Steady hedge selling by grain companies helped to put canola on the defensive.

Losses overnight in Malaysian palm oil had prompted some early selling of canola contracts as did the taking of profits by a variety of market participants given the advances seen in canola on Wednesday, brokers said.

Adding to the bearish sentiment in canola were the large global soybean supply situation and expectations for canola area in western Canada to be up significantly this spring, brokers said.

Good underlying support in canola came from steady domestic crusher demand and continued reports of fresh export business being put on the books for Canadian canola. Traders said there were indications of additional Canadian canola business being done with Pakistan on top of the normal sales of canola to Japan and Mexico.

There were an estimated 10,551 canola contracts traded Thursday, down from 11,508 during the previous session. Of the contracts traded, 6,034 contracts were spread related.

Western barley futures were unchanged and untraded with market players refusing to commit new positions due to the lack of open interest in the commodity, traders said.

There were no barley contracts that changed hands during the session. On Wednesday, no barley contracts were traded.