ICE Canada Review: CBOT Soyoil Sell-Off Undermines Canola

Activity in canola was on the lighter side with a number of key market participants attending the Canola Council of Canada’s annual conference being held this year in San Francisco, California. The rolling of positions out of the nearby May future and into deferred contract by commodity funds was a feature of the activity, brokers said.

Some of the early declines in canola were encouraged by the losses seen overnight in the e-CBOT soybeans, Malaysian palm oil and European rapeseed futures, traders said.

The downward price action displayed by CBOT soyoil values throughout the session contributed to the price weakness experienced by canola.

Sentiment that the gains seen on Wednesday were overdone and that a downward correction was needed, also accounted for some of the price weakness seen in canola, traders said.

The steady trickle of hedge offers from elevator companies was also an undermining price influence.

The declines in canola were limited in part by steady domestic processor demand and the routine pricing of old export business by commercial accounts. Some buying, believed to be the covering of short positions, also generated some underlying support for canola.

Canola also found some minor support when CBOT soybean values moved off their lows, traders said.

There were an estimated 8,294 canola contracts traded Thursday, down from 9,753 during the previous session. Of the contracts traded, 4,274 contracts were spread related.

Western barley futures were little changed in generally non-existent activity. The nearby July future was pushed lower by light commercial offerings in the absence of willing buyers, brokers said.

There were only 5 barley contracts that changed hands during the session. On Wednesday, no barley contracts were traded.