ICE Canola Undermined By Strong C$

Activity in canola was on the lighter side with market players noting that there had been little in the way of participation from the large index funds so far, brokers said. There had been ideas that some rolling of positions out of the nearby July and into the November contract would have occurred Friday.

Gains overnight in canola came from the advances seen in e-CBOT soybeans and Malaysian palm oil futures. Strength in global crude oil values also influenced some early buying.

Advances in CBOT soybean and soyoil futures with the start of the North American trading day also encouraged some support in a few canola contracts, brokers said.

Concerns about dryness in the western prairie provinces were also helping to generate some support for prices.

Selling in canola was influenced by the continued upward surge in the value of the Canadian dollar against other foreign currencies, brokers said.

The strong Canadian dollar was seen restricting domestic processor demand for canola, brokers said. Figures released by the Canadian Oilseed Processors Association early Friday showed that capacity utilization during the week ended May 27 was only 63%, which was down significantly from the previous week’s 85.9% utilization rate. Last year at this time, domestic processors in Canada were working at 92.7% of their capacity.

The absence of fresh export demand being put on the books also contributed to some of the selling that surfaced in canola, traders said.

Some of the bearish price sentiment in canola was also being linked to ideas that canola acres in western Canada could be higher than Statistics Canada s April planting intentions report forecast.

There were an estimated 4,614 canola contracts traded at 10:45 CDT.

At 10:45 CDT, no western barley futures had changed hands.

Prices in Canadian dollars per metric ton at 10:45 am CDT: