ICE Canola Down In Light Trade

Canola saw a light trade with intermonth spreading augmenting volumes. Activity was subdued with the normally dominant Chicago Board of Trade futures market closed for the US Thanksgiving Day holiday.

The total canola volume was estimated at 6,766 contracts, down from Wednesday’s 13,340 contracts, including an estimated 2,734 contracts involved in the spread trade.

Canola was mostly higher in the overnight market, prompted by the weakness in the Canadian dollar and slow farmer selling. Canola turned lower as the North American trading day got underway with prices seeing some choppiness in the thin volumes.

Canola was pressured down by the sluggish tone in exports with the continued uncertainty about export sales to China weighing on the market. Canola was also tracking the weakness in outside markets, prompted by the news that Dubai’s largest corporate entity, Dubai World, has asked creditors to defer payments on a US$60 bln loan for 6 months.

Technical signals also weighed on the market after the market was unable to penetrate resistance at the $410.00 level in the Jan contract.

News that locomotive engineers could begin a strike against CN Rail as early as Saturday also weighed on the market as it called into question Canada’s ability to be a reliable supplier, analysts said.

Underpinning the market and limiting the losses was a steep decline in the Canadian dollar and the sluggish pace to farmer selling.

Exporters and crushers were the main buyers with commercials the sellers. Traders felt some of the commercial selling could be linked to the uncertainty about a potential rail disruption.

Western barley ended a bit higher in very small activity.
Commercials were the only traders with expectations for lower barley prices in Thursday afternoon’s Canadian Wheat Board Pool Return Outlook report weighing on the market. However the lack of farmer selling lifted the market at the close, brokers said.

The total barley volume was estimated at 25 contracts, down from 31 contracts on Wednesday.

Prices are in Canadian dollars per metric ton: