By Terryn Shiells, Commodity News Service Canada
Winnipeg, July 27 – The ICE Futures Canada canola market was down sharply at midday Monday, falling below the psychological C$500 per tonne level. The declines were linked to long liquidation by speculative fund accounts after the market broke below key support levels on Friday, analysts said.
Spillover pressure from the weaker Chicago soybean complex was also weighing on canola values.
Reports of improving crop conditions for western Canadian canola and US soybeans added to the bearish tone, as did strength in the Canadian dollar.
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Traders were also selling as they become more comfortable with industry estimates calling for a Canadian canola crop of about 13.5 million tonnes, a Winnipeg-based broker said, adding that the CWB estimate of 12.5 million tonnes is likely a bit too low.
However, supplies of canola will still be on the tight side at the end of 2015/16 (Aug/Jul) due to this year’s drought in Alberta and Saskatchewan, which provided some underlying support.
Some exporter and commercial buying may also come into the market at the lows of the day, the broker added.
As of 10:48 CDT Monday, about 16,300 contracts traded. Spreading was a feature of the activity.
Milling wheat, barley and durum futures were untraded and unchanged.
Prices in Canadian dollars per metric ton at 10:48 CDT:
