ICE canola drops towards support

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By Phil Franz-Warkentin, Commodity News Service Canada

WINNIPEG, Dec. 6 – ICE Canada canola contracts were lower Friday morning, as losses in CBOT soybeans and the ongoing reaction to Wednesday’s Statistics Canada production report weighed on prices.
The record 18.0 million tonne canola crop estimated by StatsCan earlier in the week was well above both previous estimates and the year-ago level of 13.9 million tonnes. The burdensome supplies are expected to lead to a large carryout, which should continue to weigh on prices going forward, according to participants.

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Speculative selling contributed to the losses, with the market testing major downside support in overnight activity. Traders said the selling could build on itself if the support is broken. However, a corrective bounce ahead of the weekend was seen as another possibility, keeping some caution in the market.
Ideas that canola was looking cheap compared to other oilseeds provided some underlying support for canola. Continued weakness in the Canadian dollar was also supportive.
About 7,000 canola contracts had traded as of 8:48 CST.
Milling wheat, durum, and barley futures were all untraded, although wheat and durum saw some price adjustments following Thursday’s close.
Prices in Canadian dollars per metric ton at 8:48 CST:

Price Change
Canola Jan 477.50 dn 3.50
Mar 487.20 dn 3.90
May 496.20 dn 4.50
Milling Wheat Mar 216.00 unch
May 229.00 unch
Durum Mar 251.00 unch
May 255.00 unch