ICE Canola Drops On CBOT Soybean Losses, Funds

Much of the action was confined to the November, January and March canola contracts.

Overnight losses in Malaysian palm oil and European rapeseed helped to fuel some of the early selling interest in canola, brokers said. Losses in global crude oil were also viewed as an undermining price influence.

CBOT soybean futures had started the North American day session on a mixed footing, but when those values began to move lower the selling in canola accelerated, traders said.

Contributing to the declines in canola were continued fund liquidation orders. Traders said canola charts have turned bearish and the funds were eager to unload their long positions in canola, which continue to be fairly sizeable.

The absence of fresh export demand and a slight drop off in domestic processor demand in view of crush margins becoming less profitable, also weighed on canola futures.

The arrival of significant precipitation in Alberta and Saskatchewan overnight was also being seen as bearish for canola futures. Traders felt that there was a lot of crop area to canola that was unsalvageable, even with the rain, but there were other areas in which the moisture can still be of use.

The reluctance of producers to deliver canola into the cash pipeline helped to slow the price drop, brokers said. producers are unwilling sellers given the poor crop production prospects, they said.

Light pricing of old export business was also evident and helped to slow the price drop in canola. Sentiment that canola is oversold after recent sharp declines also was offering some minor support.

There were an estimated 3,469 canola contracts traded at 10:34 CDT.

There were 33 western barley futures traded as of 10:34 CDT. Activity was a light two way affair between commercials, brokers said.

Prices in Canadian dollars per metric ton at 10:32 am CDT: