ICE Canola Weakens On Outside Declines

Sharp losses in global crude oil futures helped to spark some liquidation of canola as did the sharp declines in Malaysian palm oil values overnight.

Contributing to the downward price action were the losses seen in CBOT soybean and soyoil values and reports of rain in some of the previously dry regions of Saskatchewan and Alberta during the weekend, brokers said.

The showers were said to have been of mixed benefit, with some producers indicating that the moisture has helped the crop go from poor to fair, while others said the rain did little to alleviate the ‘dust bowl’ situation, brokers said.

Commodity fund liquidation was also anticipated later in the day or possibly later this week, as speculators were still said to be holding sizeable long positions in canola with the charts turning downwards, analysts said.

Much of the buying seen in canola has been done on a scale down basis, with commercials the noted buyers. Some of the commercial demand was said to be covering domestic requirements, as well as the pricing of some Chinese business conducted last week, traders said. Some pricing of old Japanese and Mexican business was also evident.

The reluctance of producers to deliver canola into the cash pipeline given uncertain crop production prospects also helped to slow the price drop in canola, traders said.

There were an estimated 2,140 canola contracts traded at 10:35 CDT.

There were 35 western barley futures traded as of 10:35 CDT with most of that activity believed to be spreading between commercials, brokers said.

Prices in Canadian dollars per metric ton at 10:35 am CDT: