Canola slips again as funds keep selling ahead of November delivery
ICE canola futures fell across every contract Thursday as speculative funds kept trimming their long positions, with the November contract set to enter its delivery window Friday.
News
The January contract, now the most actively traded, settled at $783.10 a tonne, down $2.60. November finished at $771.70, down $2.10, while March closed at $794.90, down $2.30, and May ended at $803, down $2.50.
| ICE canola (C$/tonne) | Settle | Change |
|---|---|---|
| November | 771.70 | -2.10 |
| January | 783.10 | -2.60 |
| March | 794.90 | -2.30 |
| May | 803.00 | -2.50 |
Funds heading for the exit
The selling shows up plainly in the latest Commitments of Traders data from the U.S. Commodity Futures Trading Commission. In the week ended Oct. 20, managed money traders cut 11,438 contracts from their long canola holdings and added 10,549 new short contracts. That shrank their net long position to 86,618 contracts, down from roughly 108,600 a week earlier.
Funds are still betting on higher prices overall, but that cushion is getting thinner. The CFTC's next report, covering positions as of Oct. 27, is due out Friday.
A broker told MarketsFarm that the long liquidation was continuing Thursday and that there was no fresh bullish news to give canola a lift. The January contract also stayed below most of its major moving averages, which has made it hard for the market to hold any gains, MarketsFarm reported.
November contract enters delivery window
The November contract reaches its first notice day Friday, Oct. 30, according to ICE's contract calendar. Traders holding November positions who don't want to make or take delivery of physical canola need to roll or close them out, and trading in the contract ends Nov. 13.
That rollover helped push volume higher. A total of 78,331 canola contracts changed hands Thursday, up from 60,250 on Wednesday, and 37,222 of those were spreads.
Outside markets
Weakness elsewhere in the oilseed complex added to the pressure. Crude oil was lower, though it trimmed its losses through the day, and that dragged on vegetable oils generally. Chicago soybeans and soymeal also closed down, and Malaysian palm oil was weaker. European rapeseed managed small gains, while soyoil was roughly flat.
The Canadian dollar firmed to 71.50 U.S. cents Thursday afternoon, up from 71.25 at Wednesday's close. A stronger loonie tends to weigh on canola, since it makes Canadian seed more expensive for foreign buyers.
What it means at the elevator
The futures slide carried into local bids. PDQ regional average elevator bids, published on Alberta Canola's daily price page, put spot canola in southern Alberta at $731.57 a tonne Thursday, down $2.60. Southern Alberta bids for November delivery were $735.12 and May bids were $761.95. Spot bids averaged $718.51 in the Peace region and $719.91 in northern Alberta.
In southwest Saskatchewan, Bunge's Moose Jaw terminal opened Thursday with a net cash canola bid of $703.43 a tonne, down $4.80, SaskToday reported.
Grains
Wheat moved the other way. Minneapolis spring wheat for December gained 4.75 U.S. cents to close at $6.2450 a bushel, Kansas City hard red winter wheat rose 2.25 cents to $6.4525, and Chicago soft red winter wheat also closed higher, up from Wednesday's CME Group settlement of US$5.99 a bushel.
Chicago corn slipped half a cent to $4.5125 a bushel and oats fell 4.5 cents to $3.43. November soybeans lost 4.75 cents to settle at $12.1975, and January soybeans were down 3.25 cents at $12.3475.
Members Discussion