ICE Canola Down Following Outside Markets

Unexpectedly weak Chinese economic data caused some concern in the global markets on Tuesday, causing investors to back away from riskier assets including commodities. With calls for a lower start in the CBOT soy complex, along with overnight declines in Malaysian palm oil and European rapeseed futures, canola was also seeing some selling pressure early in the day.

Traders said technical signals were also leaving canola open to some speculative profit-taking.

However, the weather concerns in western Canada remain a supportive price influence overall, which should limit any declines in canola and keep farmer selling on the light side, according to traders.

The economic uncertainty Tuesday morning was also weighing on the Canadian dollar. The sharp weakness in the currency provided some underlying support for canola, as it should help crush margins improve and make canola more attractive to export customers.

Activity was expected to be cautious on Tuesday as market participants square up their positions ahead of July 1, which will see the Canadian markets closed for Canada Day. Traders are also awaiting some direction from the USDA acreage and stocks reports due out on June 30.

About 850 canola contracts had traded as of 8:32 CDT.

Western barley futures were untraded and unchanged early in the day.

Prices in Canadian dollars per metric ton at 8:32 CDT: