ICE Canola Pulled Lower By e-CBOT Soybeans In Thin Trade

Further discouraging buying interest were overnight declines in European rapeseed and Malaysian palm oil futures and losses in Chinese rapeseed futures after the first case of H1N1 was confirmed in China.

Lower opening calls for CBOT soybeans with the start of North American trade and the soft tone in global equities and crude oil futures also undermined canola prices, traders said.

As trade progresses, canola will face pressure tied to concerns about waning Chinese demand for North American oilseeds. Nothing to that effect was reported overnight but unconfirmed reports last week that cargoes of US soybeans had been cancelled have spooked trade participants, market watchers said.

Ideas that canola has been overbought recently and needs to correct lower may also weigh on the market, traders said.

However, in early trade the Canadian dollar had pulled back significantly versus the US dollar. Brokers said the currency’s retreat was a bullish price influence as it help encourage fresh demand for canola.

Also, the downside in canola is expected to be held in check by fears of seeding delays in Canada and the US and ahead of Tuesday’s USDA supply/demand report. According to brokers, trade participants may be reluctant to sell because the report is expected to show tightening supplies of old crop US soybeans, which could boost prices following the report’s release.

Only 242 canola contracts had changed hands as of 8:59 CDT.

Meanwhile, western barley futures were weaker but only 1 contracts had been traded as of 8:59 CDT.

Prices in Canadian dollars per metric ton at 8:59 CDT: