ICE Canola A Bit Lower On Strong C$

Canola saw a moderate trade with intermonth spreading augmenting activity.

The total canola volume was estimated at 9,253 contracts, up from Wednesday’s 6,365 contracts, including an estimated 2,284 contracts involved in the spread trade.

Canola was mostly lower in the overnight trading session on sluggish demand and technically driven selling. Canola losses faded back to very small declines after the opening of the North American trading session as the Chicago Board of Trade soy complex posted a strong rally on Thursday. Canola finished with small losses following a choppy session that saw prices turn narrowly mixed several times.

Canola was pressured down by the very strong Canadian dollar as it hits its highest level against the US dollar in 7 weeks. Also weighing on the market was the beneficial crop weather forecast through the end of the month.
"This is great weather, canola loves cool nights and 22 degree (Celsius) days," said one trader.
Bearish technical signals and eroding crush margins this week also prompted selling.

Underpinning the market was slow farmer selling, sharp gains in CBOT soybean futures and ideas that canola was oversold and due for a rally, traders said. They also noted that open interest has risen in canola this week, suggesting that demand is returning to the market after recent liquidation.

Exporters were the best buyers with Japanese pricing noted. The selling came mainly from commercials with light speculative offerings noted.

Western barley ended higher in light trade. The sharp advance in CBOT corn and slow farmer selling boosted prices despite expectations that the Canadian Wheat Board will lower feed grain prices in their Pool Return Outlook this afternoon, brokers said.

End user were the best buyers against commercial selling. "I think end users are a bit nervous about the USDA resurvey of US corn acreage (announced Wednesday) and they just want some coverage incase the new (acreage) numbers turn out to be bullish", said a trader.

The total barley volume was estimated at 104 contracts, up from no volume on Wednesday.

Prices are in Canadian dollars per metric ton: