ICE Canola Corrects Slightly Lower

After climbing higher on Monday canola was due for a downward correction and that profit-taking weighed on values in the overnight trade, said market participants. A firmer tone in the Canadian dollar was also putting some pressure on canola.

Calls for a steady to lower start to the North American session for the CBOT soy complex, along with overnight declines in Malaysian palm oil futures were also expected to lead to some spill-over selling in canola.

However, canola should remain well supported by the excessive moisture conditions causing seeding delays and crop damage across much of western Canada. Traders estimate that two million acres or more of the intended canola acres will likely end up unplanted, while already seeded fields are seeing damage from the wet weather.

A lack of farmer selling, as they wait to get a better handle on this year’s production, should be supportive for canola, according to an analyst.

About 1,940 canola contracts had traded as of 8:26 CDT, with the July/November spread the feature of the early activity.

Western barley futures were untraded and unchanged in overnight activity.

Prices in Canadian dollars per metric ton at 8:26 CDT: