ICE Canola Lower after StatsCan Report

The report showed 2.123 million metric tons of canola in Canada as of July 31, 2010, which was about 1 million metric tons more than expected. A trader said a lot of producers in western Canada were holding onto old canola supplies.

The Canadian dollar was much stronger early Wednesday because of an interest rate increase from the Bank of Canada, which scared some exporters away. A firmer currency makes canola priced in Canadian dollars less attractive to exporters and it also cuts into domestic crush margins, brokers said.

Export activity was routine.

Not all of the activity was bearish, however. A trader said weather forecasts in the Canadian prairies are calling for more rain this week, and frost early next week. The weather outlook was helping to create additional yield uncertainty, brokers said.

There had been a little of bit of speculative selling, as well as some producer offerings earlier in the session, the trader said.

At 10:30 CDT, there had been about 10,000 canola contracts traded.

Western barley futures for December had 25 contracts traded to midsession, with the price unchanged.