Canola contracts on ICE Futures walked back significant gains during the week ended Sept. 24, after hitting two-year highs the week prior.
Canola prices started the week at $526.40 per tonne, with the November contract losing $4.90 per tonne on Monday. Losses continued for the rest of the week, and the November contract closed at $511 per tonne on Thursday.
The correction lower was partially attributed to speculative funds leaving the market, which had initially given canola its strength. That, combined with a lack of fundamental support, meant prices couldn’t maintain their two-year highs.
Harvest activity was another bearish influence on canola this week. In Manitoba, about 78 per cent of the canola crop is in the bin, outpacing the average rate of harvest. Across the province, about 70 per cent of all crops are harvested. Saskatchewan has harvested about 61 per cent of its canola crop, while 77 per cent of all crops are off the field.
Weakness in Chicago soyoil also spurred losses for canola, with nearby contracts losing about 2-1/2 cents on the week. Part of the weakness can be attributed to traders positioning ahead of the October contract’s expiry next week.
A slight dip in the Canadian dollar provided paltry support for canola, as the dollar hovered around 75 U.S. cents for most of the week.