ICE Canada Review: Strong C$ Sparks Canola Sell-Off

Position evening ahead of the weekend was a feature of the activity.

The strength of the Canadian dollar was said to have hurt crush margins for domestic processors significantly and also made canola less attractive on the export market, traders said. As a result, demand from those sectors declined Friday allowing canola to be pushed lower.

Adding to the bearish atmosphere in canola were the losses seen in CBOT soybean and soyoil values, brokers said.

A steady trickle of hedge selling by elevator companies in western Canada contributed to the downward price slide experienced by canola.

The record large soybean supply situation in South America and the prospect of increased seeded area to canola in western Canada and soybeans in the US this spring, contributed to the price weakness, brokers said.

The losses in canola were also amplified when technical support levels were penetrated, traders said.

Scale down pricing of canola by commercials helped to temper the declines.

There were an estimated 7,168 canola contracts traded Friday, down from 10,551 during the previous session. Of the contracts traded, 2,174 contracts were spread related.

Western barley futures were little changed. Activity in barley was non-existent with market players no longer wanting to participate in a contract that they see is a non viable pricing option, brokers said.

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