ICE Canada canola futures closed lower on Tuesday as favourable harvest weather, weaker soybean prices and a strong Canadian dollar weighed down the market, traders said. Environment Canada is forecasting mostly warm, dry weather for Prairies this week at a time of year when lasting snowfall is usually on the ground.
The canola harvest in Saskatchewan could be complete in seven to 10 days, a Canola Council of Canada official said on Tuesday. US Department of Agriculture raised on Tuesday its estimate for 2009 US soy production to a record 3.319 billion bushels, up from the October estimate of 3.25 billion and the average trade estimate of 3.262 billion bushels.
The estimate was bearish for CBOT soybean futures, which influence canola because of common uses in vegetable oil and fuel. January fell $2 to settle at $383.20 with a volume of 6,331 contracts March dropped $2.20 to settle at $389 on a volume of 359 contracts. The January-March spread traded 325 times with a premium on March between $5.50 and $6.20.
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