ICE canola follows CBOT soy complex lower

Alana Vannahme, Resource News International

March 25, Winnipeg – Canola futures on the ICE Canada platform were trading at lower levels as of 10:42 CDT on Wednesday amid quiet trade.

With no fresh news to drive prices, canola contracts were taking their cues from the steady selling seen in the CBOT soy complex, brokers said.

Strength in the Canadian dollar was bearish for the market as well as it helped to curb buying interest, traders said.

Producer offerings and elevator hedge selling earlier in the session also accounted for some of downside in the market, a Winnipeg trader said. The pace of country movement is not overwhelming but decent basis levels in western Canada continue to attract farmer interest, he said

Further adding to the downward pull on prices was the downward movement of crude oil futures, the lack of fresh export news and the bearish tone generated by overnight losses in vegetable oil markets.

A rally in North American equity markets and the implementation of spring road restrictions provided a floor for the canola market, according to market watchers.

The farmers strike in Argentina to protest the country’s 35 per cent soybean export tax was a supportive feature for the trade as well although brokers said the support has already been priced into the market.

In the coming sessions, positioning ahead of the March 31 U.S. Department of Agriculture Prospective Plantings report is expected to be a feature of the trade. Analysts are expecting the report to show high U.S. soybean acres.

Trade in canola was light. As of 10:42 CDT, 6,153 canola contracts had been traded and of that amount, 4,462 were tied to inter-month spreading by commodity funds and commercial participants.

There was no interest in the western barley market on Wednesday, leaving contracts untraded and unchanged as of 10:42 CDT.

Prices in Canadian dollars per metric ton at 10:42 CDT:

          Price    Change
Canola
     May     421.50    dn 1.10
     Jul     424.70    dn 3.10
     Nov     428.20    dn 5.20
 
Western Barley
     May     146.00    unch
     Jul     153.90    unch