Statistics Canada shocked the market last week by estimating larger-than-expected Canadian canola production, leading to increased farmer selling into the cash market - traders.
Funds seen holding net short position of 17,000 to 20,000 contracts as the market reached new lows.
Long liquidation also seen ahead of Tuesday's U.S. Department of Agriculture (USDA) report.
January canola dropped $5.60 at $466.30 per tonne on volume of 14,347 contracts, touching the lowest nearby price since October 2010.
March canola lost $5.50 at $476.30 on volume of 19,606.
January-March spread widened to a March premium of $10, trading 10,227 times.
Canola shrugged off strength in Chicago January soybeans , which rose 18-1/4 U.S. cents at US$13.43-3/4 per bushel on Chinese demand and positioning ahead of the USDA report.
NYSE Liffe Paris February rapeseed eased 0.7 percent.
February Malaysian palm oil slipped 0.9 percent.
Canadian dollar was trading at $1.0642 versus the U.S. dollar or 93.97 U.S. cents at 1:07 p.m. CST (1907 GMT), up from Friday's close at $1.0656 to the greenback, or 93.84 U.S. cents.