ICE Canada Grain/Oilseed Review: Canola Lower On Weak US Soy

Canola saw a light trade with only small amounts of intermonth spreading. Traders felt that activity would be slow through the end of the month as traders assess the crop conditions with many participants also away for holidays.

The total canola volume was estimated at 5,544 contracts, down from Friday’s 7,832 contracts, including an estimated 384 contracts involved in the spread trade.

Canola was lower in the overnight session on weakness in international vegetable oil markets. Canola continued to see declines as the North American trading session got underway and the CBOT soybean market posted losses. Canola firmed off its lows as the day progressed and selling slowed. Canola ended only modestly lower.

Canola was pressured down by favorable growing conditions, weakness in the CBOT soybean market and sluggish fresh demand. Bearish technical signals also weighed on values.

Giving some support and helping to pull canola back to almost unchanged was the lack of farmer selling, gains in CBOT soyoil abnormally low temperatures in Alberta over the past 4 days. Talk that canola yields will be below normal this year also limited the losses.

Demand was fairly steady and that helped to pull prices higher in the absence of significant selling. Exporters were the best buyers with crushers and Japanese buying also noted. The selling came from commercials and speculators with commodity funds continuing to liquidate their Nov long position. Traders pegged fund selling as 500 to 1,000 Nov contracts.

Western barley ended lower in light commercial trade with prices pressured down by sluggish demand and weakness in feed grain prices generally, brokers said.

The total barley volume was estimated at 74 contracts, down from 135 contracts on Friday.

Prices are in Canadian dollars per metric ton: