ICE Canola Undermined By Outside Losses, Profit-Taking

Canola prices pulled back overnight in response to weakness in e-CBOT soybeans, Malaysian palm oil and European rapeseed values, traders said.

The soft tone in global equities and falling crude oil futures added to the downward price slide.

Canola’s early losses could be extended when North American trade begins in Chicago, as soybeans are called 7 to 10 US cents bushel lower, market watches said.

Brokers believe profit-taking will weigh on canola futures as the trading day progresses, as could ideas that the market needs to consolidate following last week’s strong advances.

Canola’s technical signals are looking increasingly like they may turn bearish, which may further discourage buying interest.

However, the significant retreat of the Canadian dollar will help offset some of the downward pull on prices.

Fears about continued cold weather this week will also prop up canola values. Temperatures in parts of Saskatchewan and Alberta have already dipped below freezing this week and cool weather is expected to linger in the coming days.

Damage is likely minimal because crop emergence is slow this year but weather is causing nervousness nonetheless, brokers said.

Routine exporter pricing and slow farmer selling will also provide a floor for canola.

As of 10:05 am EDT, 1,991 canola contracts had changed hands, a portion of which was tied to spreading.

There was no interest in the western barley market, leaving contracts untraded and unchanged from Tuesday’s closing values as of 10:05 am EDT.

Prices in Canadian dollars per metric ton at 10:05 am EDT: