ICE Canada Review: Overbought Sentiment Fuels Canola Loss

The lack of willing buyers in the market helped to amplify some of the downward price slide seen in canola with some late day hedge selling by grain companies also helping to fuel the price weakness, brokers said.

Firmness in the Canadian dollar was an undermining price influence as was the late sell-off seen in CBOT soyoil futures.

The absence of fresh export demand contributed to the bearish price atmosphere seen in canola, traders said.

Position evening ahead of the weekend was a feature of the activity and next week’s updated acreage survey from Statistics Canada.

The report, to be released on June 23, was expected to be discounted by a number of market participants as the survey was likely conducted before the heavy precipitation which impacted seeding operations across western Canada. However, others felt the government agency accounted for the wet conditions, with the survey giving them at least a good point in which to base their own predictions.

Underlying support in canola came from steady domestic processor demand and from the pricing of old export business to Japan, traders said. The weather uncertainty across the Canadian prairies and the impact on seeding and canola production was also an underpinning price influence.

The advances seen in CBOT soybeans also provided some light underlying support.

Spreading was again a feature of the activity in canola and helped to augment the volume total.

There were an estimated 17,263 canola contracts traded Friday, down from the 25,273 contracts during the previous session. Of the contracts traded, 10,540 consisted of spreads.

Western barley futures were steady to higher with the nearby July future pushed up by the absence of willing sellers and light commercial demand, brokers said.

On Friday, 22 barley contracts were traded. On Thursday, 25 barley contracts changed hands.