ICE Canola Weakens As Weather Improves

While canola in western Canada is still not out of danger from an early frost, conditions are looking very good for crop development this week and producers are swathing fields in many locations.

A Winnipeg-broker said the improved crop conditions will likely lead to an increase in yields, and he thought the better yield prospects were resulting in speculative selling on Wednesday.

He said farmer hedges were also picking up given the expectations for a larger crop.

The CBOT soy complex was also weaker on Wednesday, which added to the softer tone in canola, said the broker.

Early weakness in the Canadian dollar provided some support for canola, according to the broker. However, the currency eventually moved off of its lows and was providing little direction for canola by midsession.

Scale-down end-user pricing also limited the downside, although the broker said buyers were not very aggressive as they are also starting to anticipate a larger crop.

At 10:55 CDT, about 7,600 canola contracts had changed hands.

Western barley futures were mixed at midsession with 82 contracts traded by 10:55 CDT. Losses in CBOT corn accounted for some spillover selling pressure in barley, although ideas that recent declines in barley may be a little overdone provided some support for the market.

Prices in Canadian dollars per metric ton at 10:55 CDT: