ICE Canola Eases on Bearish Charts, Strong C$

Early declines in canola were encouraged by the sell-off seen in Matif rapeseed futures and Malaysian palm oil values overnight, brokers said.

Strength in the Canadian dollar was an undermining price influence as was elevator company hedging. There were ideas that producers in western Canada have been a bit more willing to deliver canola in the cash pipeline sensing the downturn in global oilseed values was set to continue in the near-term, traders said.

The favourable weather conditions for the development of the South American soybean crop helped to weigh on canola futures, brokers said.

"Some of the activity in canola also included stop-hunting, with some participants trying to find a price level in which those orders will be triggered," a trader said.

Reduced demand from domestic processors also contributed to the price weakness in canola.

The volume of trade in canola was described as good, considering the closure of the US markets for Martin Luther King Jr., Day.

The declines in canola were being slowed by steady export demand. Traders noted the steady lineup of vessels at Canada’s export terminals waiting to load canola.

"While China may not be picking up a lot of Canadian canola, the exporters have found other locations to ship the commodity," a trader said.

There were an estimated 5,416 canola contracts traded at 10:28 CST. Of the contracts traded, 1,922 were spread related.

There were no western barley futures traded as of 10:28 CST. Some underlying weakness in barley was linked to the warmer temperatures, which have been covering Western Canada, and which has helped to reduce livestock rations for end-users, brokers said.