ICE Canola Undermined By Strong Loonie

Canola saw a light to moderate trade with intermonth spreading augmenting the volumes.

The total canola volume was estimated at 8,700 contracts, down from Friday’s 12,824 contracts, including an estimated 2,374 contracts involved in the spread trade.

Canola was higher in the overnight trade as international vegetable oil prices climbed to 14 week highs. Canola held onto its gains as the North American trading session got underway and the Chicago Board of Trade soy complex opened higher. Canola followed the gyrations in the CBOT soy complex ending the session with losses.

Canola was pressured to losses by the very strong Canadian dollar, the volatile and weakening tone to the CBOT soy complex and heavier farmer selling.

Cash bids have hit over C$9.00/bu in several areas of western Canada and that triggered country movement.
"I wouldn’t call it (farmer selling) heavy but it has definitely picked up," said a cash dealer.

Sluggish export activity with continued uncertainty about whether China would take canola also weighed on prices.

Technical signals turned negative during the session and that weighed on the market, said traders. "Jan (canola contract) spent about an hour trying to penetrate resistance at the $410-$411 area and eventually gave up and that turned the technical signals bearish", said a trader.

Giving some support was the early strength in international vegetable oil prices and ideas that canola is well priced in the international market, brokers said.

Routine exporter and crusher buying was augmented by some early speculative buying.
Today’s selling came from commercials with elevator company selling also noted.

Western barley ended untraded and unchanged amid a lack of interest.

Prices are in Canadian dollars per metric ton: