ICE Canada Grain/Oilseed Review: Canola Falls on Strong C$

Canola saw an active trade, but the bulk of the activity was intermonth spreading as commercials and commodity funds were rolling July futures in the Nov contract.

The total canola volume was estimated at 16,767 contracts, up from Tuesday’s 11,186 contracts, including an estimated 11,880 contracts involved in the spread trade.

Canola was lower in the overnight market, reflecting sluggish demand and ignoring strength in international vegetable oil markets. Canola briefly turned mixed as the North American trading session got underway and the Chicago Board of Trade soybean market rallied. However, canola turned back down by midday as demand was lackluster with the market ending lower.

Canola was pressured by the very strong Canadian dollar, eroding crush margins and bearish technical signals. Favorable growing and planting conditions across much of western Canada also pressured the market down. The lack of significant fresh export demand contributed to the weakness as well.

Giving some support was the early firm tone in the CBOT soy complex, only routine farmer selling and gains in crude oil, analysts said.

Routine exporter and crusher pricing was augmented by commercial short covering. The selling came from exporter liquidation selling, steady elevator company offerings and light commission house profit taking.

Western barley futures ended mixed in moderate trade. End user demand met mainly commercial liquidation selling in the July contract, brokers said.

However, traders noted that the low open interest in barley has limited participation in the contract with many commercials waiting to see the new revamped barley contract that the exchange is preparing.

The total barley volume was estimated at 494 contracts, up from 86 contracts on Tuesday, including an estimated 96 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: