ICE Canola Weakens on C$ Strength, Poor Demand

The upsurge in the value of the Canadian dollar continues to sideline domestic processors with exporters also having difficulties putting new canola sales on the books, traders said.

Contributing to the weakness in canola was topping action on the charts. Speculators were light sellers of canola in the early activity.

The losses in canola were being slowed by uncertainties regarding the crop and the impact of adverse weather on yield potential. Traders indicated that frost has caused many producers to reseed while others have decided not to due to the lateness of the season.

"It really has become a waiting game, as producers try to decide if they have a crop to work with or whether the frost has devastated production," a broker said.

One analyst indicated that virtually all of the canola crop in western Canada has been touched by frost in recent weeks and that the potential for an above average crop is virtually gone with the possibility of getting an average crop also a "big question mark".

Some support in canola also came from the price firmness seen in CBOT soybean and soyoil values.

Activity in canola was on the lighter side, with a number of market participants taking to the sidelines to wait out Wednesday’s latest round of supply/demand tables scheduled to be released by the USDA.

There were an estimated 6,962 canola contracts traded at 10:43 CDT. Of the contracts traded, 3,920 were spread related.

There were no western barley futures traded as of 10:43 CDT. Traders noted that with the recently announced revisions to the barley contract, most participants are content to sit on the sidelines and use alternative market strategies instead of trading barley futures.

Prices in Canadian dollars per metric ton at 10:43 am CDT: