ICE Canola Down In Choppy Overnight Trade

Canola saw a moderate trade with an estimated 1,516 contracts traded as of 08:46 CDT, mainly in the Nov contract. Positioning and evening up has started to appear ahead of Friday’s Statistics Canada production report.

Canola was mixed overnight bouncing above and below Monday’s close amid a lack of strong direction from outside sources. Ultimately prices eased as the e-cbot soybean market declined which intensified a bearish mood that has appeared in canola this week, traders said.

Canola is expected to continue to see losses as the North American trading session gets underway and the Chicago Board of Trade soybean market is expected to decline. However, traders note there are no strong market pressures and they expect canola to see a modest decline amid the
growing bearish mood, prompted by recent losses. The Canadian dollar is modestly higher this morning.

Favourable growing conditions in western Canada were also a negative factor hanging over the market although traders continue to indicate that "frost is never far from your mind". Overnight temperatures in Brandon , Manitoba dropped below the 4 degree Celsius mark reinforcing the concerns about the crop being very vulnerable to the frost threat, said brokers.

Bearish technical signals will contribute to the price slide with some technicians now looking for a test of the C$400 per metric ton level in the Nov contract.

Giving support is the lack of farmer selling and steady commercial demand. "The commercial buying is interesting," said a trader, "It’s not flashy, it’s not aggressive but it is steadily there."

Some traders felt that canola could rally during today’s session on ideas that recent losses have left the market oversold.

Western barley futures are untraded and unchanged. The market is expected to decline in the wake of losses in CBOT corn and the continued sluggish demand as lower livestock numbers and competition from US Distilled Dried Grain products limit end user demand, analysts said.

Prices at 08:43 CDT in Canadian dollars per metric ton: