ICE Canola Drops on Profit-taking, CBOT Decline

Declines in e-CBOT soybean values overnight weighed on canola early with the downturn in global crude oil futures also sparking some speculative offerings, brokers said.

The declines in canola were augmented by the losses seen in CBOT soybean and soyoil futures with the start of the North American day session.

Helping to weigh on canola futures was the strong Canadian dollar. The Canadian unit moved to an eight month high in early activity and was still trading above the 92 US cent level.

The strength of the Canadian dollar was causing domestic processors to back away from the market with exporters also having trouble putting new sales on the books, traders said.

Sentiment that the advances seen on Monday were overdone and in need of a small downward correction accounted for some of the selling that surfaced in canola, brokers said.

The losses in canola were being slowed by weather related issues. The lack of moisture in parts of the west-central regions of Saskatchewan and the east-central areas of Alberta to help with crop germination was seen as supportive.

Cool temperatures overnight in parts of Alberta that may have resulted in some frost and weather outlooks calling for the potential for frost in Saskatchewan tonight also was helping to keep a weather premium in the market, traders said.

They said parts of Saskatchewan saw temperatures dip as low as minus 4 degrees Celsius overnight and further cold weather is forecast in the coming days.

Inter-month spreading was linked to the heavier than normal volume totals in canola.

There were an estimated 10,309 canola contracts traded at 10:46 CDT.

At 10:46 CDT, 86 western barley futures had changed hands. A small pick up in commercial demand amid a lack of willing sellers allowed the nearby July future to be pushed upwards, brokers said.

Prices in Canadian dollars per metric ton at 10:46 am CDT: