ICE Canola Midday: New crop taking a beating

By Glen Hallick, MarketsFarm

WINNIPEG, April 12 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were weaker at midsession on Wednesday, with double-digit losses in the new crop positions.

An analyst said pressure from a sharp drop in Malaysian palm oil prices was to blame. He warned the new crop November canola contract could fall below C$700 per tonne, with support at C$680. He also noted that resistance was at C$740, as he expects trading to be rangebound.

“That’s the ‘chop zone’ until we get into the growing season,” the analyst commented.

Besides weakness in Malaysian palm oil, pressure on canola also came from losses in the Chicago soy complex and especially steep declines in European rapeseed. As global crude oil prices traded within US$1 per barrel of unchanged, they were lending support to help stem further losses in the vegetable oils.

The Canadian dollar was slightly higher on Wednesday with the loonie at 74.28 U.S. cents, compared to Tuesday’s close of 74.17.

Approximately 26,300 canola contracts were traded as of 10:32 CDT.

Prices in Canadian dollars per metric tonne at 10:32 CDT:

Price      Change

Canola            May     768.50    dn  0.80

Jul     739.80    dn  7.30

Nov     704.00    dn 10.30

Jan     706.20    dn 10.10