ICE Canola Turns Lower Following StatsCan Stocks Report

Canadian canola stocks at the close of the 2009/10 (Aug/Jul) crop year were pegged at 2.1 million metric tons by Statistics Canada, which was nearly a million tons above most trade estimates and the second highest carryout on record. Traders said the high stocks were likely due to the fact that production in 2009/10 was larger than reported by StatsCan. The extra supplies should relieve some of the concerns regarding the current crop, and were causing end users to back away from the canola market, according to traders.

A stronger tone in the Canadian dollar, which was reacting to an interest rate hike by the Bank of Canada, also weighed on canola. A firmer currency makes canola priced in Canadian dollars less attractive to exporters and it also cuts into domestic crush margins.

Ongoing production uncertainty remained a supportive influence, with the potential for frost becoming more of a concern across western Canada, according to traders.

CBOT soybeans were being called mixed to start, and could provide some direction for canola depending on which way that market moves. The USDA releases its updated supply/demand tables on Friday, and some positioning ahead of those reports was expected.

About 4,000 canola contracts had traded as of 8:36 CDT.

Western barley futures were untraded and unchanged Wednesday morning.

Prices in Canadian dollars per metric ton at 8:36 CDT: