ICE Canada canola futures closed lower on Monday as the technically weak market sagged with harvest selling and a stronger Canadian dollar, traders said. Canola has been mainly falling for almost two months as farmers harvested a crop that avoided major frost damage. November has fallen about 18 percent since August 13
November's relative strength index, an indicator for technical trading, is lower than 30, signalling the market is oversold. November canola fell $3.10 to end at $371.20 per tonne on volume of 7,389 contracts. The front month dipped to a contract low of $370.10, usually a sell signal for funds.
The low is canola's weakest price overall since December 9. January dropped $3.60 to settle at $376.20 with a volume of 3,483 contracts. Support is seen around $369, one trader said, but others said canola may slide for two weeks until the US harvest is complete. The November-January spread traded 3,328 times with a premium on January between $4.60 and $5.30.
The Canadian dollar was trading around $1.0729 against the US currency or 93.21 US cents at 1:15 pm CDT (1815 GMT), up from Friday's close of $1.0825 against the US dollar or 92.38 US cents. A stronger dollar makes canola more costly to export, but one trader said talk circulated of a new sale to China. CBOT November soyabeans finished unchanged at US $8.85 a bushel, while the other near months weakened slightly. Light crude oil was up 51 US cents at US $70.47.