ICE Canola Contracts Ease On Hedges, CBOT Soybean Loss

Canola had moved up earlier in the session reflecting the overnight advances in Malaysian palm oil and European rapeseed futures. The higher start seen in CBOT soybean and soyoil values with the start of the North American day session had also influenced some early buying of canola.

However, at the highs of the day, the buying interest dried up in canola, allowing values to begin moving to lower ground. The declines in canola were augmented when the advances in CBOT soybeans and soyoil turned into losses, brokers said.

The hedging by the grain companies was reflective of western Canadian producers willing to sell both old and new crop canola as long as they can get decent basis levels, traders said.

Talk that canola area in Canada could top out at a record 20 million acres this spring, based on predictions made at the Canadian Wheat Board’s Grain World conference being held here, helped to inspire some minor selling interest, brokers said.

The relative firmness of the Canadian dollar and the continued absence of fresh export demand contributed to the bearish price atmosphere in canola.

The ongoing harvest of a record sized soybean crop in Brazil was also an undermining price influence.

Some underlying support in canola came from the pricing of old export business to Japan by commercial accounts. Some light, scale down buying by domestic processors was also evident and helped to restrict the price weakness, traders said.

Activity in canola was described as extremely choppy, with spreading again helping to augment the volume total.

There were an estimated 6,515 canola contracts traded at 10:49 CST. Of the contracts traded, 1,882 were spread related.

There were no western barley futures traded as of 10:49 CST.