ICE Canola Remains On the Defensive

By Dwayne Klassen, Commodity News Service Canada

Winnipeg – August 28/12 – CNS – Canola contracts on the ICE Futures Canada platform were trading at mostly lower price levels at 10:27 CDT Tuesday morning. Some nervous liquidation by speculative and commodity fund accounts helped to weigh on canola with a small pick up in farmer deliveries overnight also putting values on the defensive, market watchers said.

The early losses experienced by CBOT soybean and soyoil futures contributed to the bearish price tone in canola, traders said. Losses overnight in Malaysian palm oil and European rapeseed values also undermined canola.

Some of the liquidation seen in canola early was associated with the taking of profits. “There seems to be a lot of nervous participants who are taking profits on just small price swings,” a broker said.

The continued upswing in the value of the Canadian dollar was an undermining price influence on canola values with mostly favourable weather conditions in western Canada for harvest activities adding to the bearish price sentiment.

The downside in canola was being capped by continued indications that yields, based on early harvest results, are coming in at below normal levels, traders said.

Scale down domestic crusher and export demand was also helping to slow the price drop seen in canola.

As of 10:27 CDT, about 5,197 canola contracts had traded.

There were 3 milling wheat contracts traded at weaker price levels. Durum and barley were untraded and unchanged.

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