ICE Canola Declines, CBOT Weakness Bearish

Early weakness in canola also reflected the declines seen overnight in e-CBOT soybean futures, Malaysian palm oil and European rapeseed values.

A drop off in domestic processor demand added to the bearish price sentiment. Figures from the Canadian Oilseed Processors Association for the week ended June 3 showed that crushers were only working at 45.4% of their capacity, which was down from the previous week’s 63% pace. Last year at the same time, western Canadian processors were working at 92.1% of their capacity.

The absence of fresh export demand helped to undermine canola contracts with China reportedly out of the market, brokers said.

Some weakness in the market also came in the form of precipitation in some parts of the dry regions of western Canada overnight. The rains, however, were said to be extremely light with more required soon, traders said.

The losses in canola were limited by frost concerns in western Canada with readings overnight moving below freezing in a few areas. Frost warnings for Saskatchewan and Manitoba Friday night were also helping to limit the downside in canola, traders said.

Weakness in the Canadian dollar early on Friday was also seen as supportive for canola futures. The Canadian currency in early activity had dropped below the 90 US cent level.

Routine exporter pricing and the slow pace of farmer selling also was providing a firm floor for canola contracts.

The rolling out of the nearby July contract and into the November future by commodity fund accounts continued to be a key feature of the activity in canola.

There were an estimated 7,450 canola contracts traded at 10:37 CDT. Of the contracts traded, 6,442 were spread related.

There were no western barley futures traded as of 10:37 CDT.

ICE Futures Canada announced late Thursday that they have received approval to list a new Western Barley futures contract.

The current Western Barley futures contract months from March 2010 onward are to be delisted immediately. July09, October09, and December09 contracts will remain listed, ICE Futures Canada said.

The main change is a shift in the contract delivery area from Saskatchewan to southern Alberta, where the western Canadian livestock feed industry is concentrated.

The contract was revamped in order to encourage more interest in the often thinly traded market.

Prices in Canadian dollars per metric ton at 10:37 am CDT: