ICE canola futures turned lower Tuesday, surrendering much of Monday’s advance as weakness across crude oil and the broader vegetable oil complex pulled prices back.
The November contract fell $10.90 to settle at $824.30 per tonne, while January lost $10.70 to close at $836.10 per tonne.
The reversal followed pressure from Chicago soyoil, European rapeseed and Malaysian palm oil, with softer crude oil prices adding another bearish influence. Energy remains particularly important for oilseed markets because of its connection to biodiesel and renewable fuel demand.
Technical selling also contributed to the decline after the recent rally. Despite the setback, November canola remained slightly above its 20-day moving average and comfortably above longer-term technical support.
Prairie weather is also becoming less supportive for nearby prices. Temperatures are expected to reach the high teens to low 20s Celsius with limited rainfall, allowing farmers to make progress on a harvest that has been delayed in several regions.
The Canadian dollar offered some offsetting support. The loonie weakened to around 71.05 U.S. cents, improving the value of Canadian commodities priced against U.S. benchmarks.
Going forward, canola will continue to take direction from the vegetable oil complex, crude oil volatility and the pace of Prairie harvest movement. A faster harvest could increase commercial deliveries, while renewed strength in energy or global vegetable oils would help restore some of the risk premium lost Tuesday.
Source : Syngenta.ca