ICE Canola Lower on Overall Demand Concerns

A drop in crush margins were said to have caused demand from local processors to decline, a Winnipeg-based trader said. Margins for canola were said to have fallen C$6/metric ton.

Adding to the bearish tone of values was China’s national bank, which raised reserve requirements another 50 basis points, putting the level now at around 20%. This put fear into the market that Chinese demand for commodities will wane, experts said.

Market watchers said most of the selling was being done by speculative accounts, while hedging by producers was another bearish factor on the markets.

A stronger Canadian dollar also put canola values on the defensive, brokers said.

The losses were tempered by concerns about flooding this spring across western Canada, which may impact the amount of canola that will be seeded, analysts said.

Underlying support was also coming from the need to ration supplies, market watchers said.

Activity in canola was described as choppy ahead of Monday’s holidays. Monday is Louis Riel Day in Manitoba, Family Day in Alberta, Saskatchewan, and Ontario, as well as
Presidents’ Day in the US.

At 10:35 CST, there had been about 9,500 canola contracts traded, with about 7,200 of those tied to spreading.

Western barley futures were unchanged and untraded at midsession.

Prices in Canadian dollars per metric ton at 10:35 CST: