ICE Canola Down In A Thin Choppy Trade

Canola saw a light trade with intermonth spreading augmenting activity. Positioning was noted ahead of Friday’s Statistics Canada production report.

The total canola volume was estimated at 6,706 contracts, down from 7,811 contracts on Monday, including an estimated 1,226 contracts involved in the spread trade.

Canola bounced to both sides in the overnight trade amid a lack of fresh news. Canola maintained its choppy mixed tone as the North American trading session got underway and the Chicago Board of Trade soy complex started a bit lower. However, the US soy market turned choppily mixed after its opening and that was mirrored in the canola market. Canola ended the day marginally lower on a lack of demand.

Canola was mainly undermined by sluggish demand with export buying felt to be at least C$5.00 under current values. The firm Canadian dollar and the favourable growing conditions forecast through next week also weighed on the market, traders said. Bearish technical signals contributed to the weak tone.

Underpinning the market and leading to choppiness was modest strength in the CBOT soy complex, slow farmer selling and the need to keep a weather premium in the market.
Overnight temperatures in western Manitoba dropped below 4 degrees Celsius maintaining concern about potential frost impact on the late canola crop, traders said.

Japanese pricing gave some support with selling coming from commercials and elevator companies. Locals, commission houses and commodity funds were light traders on both sides of the market.

Western barley posted losses in very light trade. The lack of significant end user demand allowed the market to post losses, brokers s said.

The total barley volume was estimated at 70 contracts, down from 319 contracts on Monday, including an estimated 50 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: