ICE Canadian canola futures fell on Tuesday to their lowest price in nearly one week, as modest selling by funds and light commercial hedges were enough to drop the market lower in thin volume, traders said. Funds seen selling 2,000 May contracts with an eye on weaker US soy and grain markets.
Total volume continues to be light after long liquidation in February and ahead of Thursday's US government crop report. Totalled about 11,200 contracts, lightest in seven weeks. Most-active May ended down $7.20 or 1.2 percent at $585.40, volume 8,323. Touched low of $580.40 July down $7.10 at $592.40, volume 1,698.
Delivery of 12 March contracts on Tuesday. May-July spread traded 981 times, with July premium ranging from $6.50 to $7.20. Chicago May soybeans settled down 13 US cents or 0.9 percent at US $13.82 per bushel, weighed down by expectations for a bumper South American soy crop. Soybeans and canola are linked through vegetable oils market and both follow crude oil prices due to use in biofuels. Canadian dollar trading at $0.9717 to the US dollar or US $1.0291 at 1:14 pm CST (1914 GMT), up from $0.9729 to the US dollar, or US $1.0279, at Monday's close. NYMEX crude oil futures down 19 US cents at US $105.25 per barrel.
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