By Glen Hallick, MarketsFarm
WINNIPEG, Dec. 6 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were lower on Tuesday, as a major revaluation of the oilseed wraps up, according to a trader.
“It was wildly undervalued, now it’s a little bit on the cheap side. At least we are in a more normal ranges of crush indexes,” he said.
Once historically massive, canola crush margins have retreated to less than C$200 per tonne above the futures.
The trader also noted that Australia is to have a bumper canola crop of 7.3 million tonnes and increased exports out that country are very likely to hurt Canadian overseas sales.
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Pressure on canola was coming from a downturn in Chicago soyoil, which the trader said has been hurt by a sharp drop in diesel prices.
As well, global crude oil prices were pulling back today putting pressure on vegetable oils. That slowed increases in European rapeseed and Malaysian palm oil but had little effect on sharp gains in Chicago soybeans and soymeal.
The Canadian dollar was lower on Tuesday as the loonie fell to 73.36 U.S. cents, compared to Monday’s close of 73.90.
Approximately 15,650 canola contracts were traded as of 10:43 CST.
Prices in Canadian dollars per metric tonne at 10:43 CST:
Price Change Canola Jan 855.80 dn 3.30 Mar 845.60 dn 4.40 May 848.30 dn 5.60 Jul 851.00 dn 6.50
