ICE Canola Down In US Soy Losses

Canola saw an active trade with intermonth spreading enhancing volumes as commodity funds were rolling their Nov contracts into Jan ahead of the end of the month.

The total canola volume was estimated at 15,109 contracts, up from 13,702 contracts on Friday.

Canola was a bit higher for most of the overnight session on talk of frost, export activity and the weak Canadian dollar. The market ignored weakness in e-cbot soybeans.
Canola turned a bit lower as the North American trading session got underway and the CBOT soybean market posted larger than expected losses. Canola ended lower.

Canola was pressured down by the weakness in CBOT soy complex moving to it’s lows in the wake of the late declines in CBOT soy futures. Canola
was also pressured down by bearish technical signals which stimulated speculative selling. The Nov contract broke through support at the C$388 and C$386 per metric ton level. The advancing harvest, large canola crop and heavier farmer selling all contributed to the losses, traders said.

However, canola’s decline was not as large as the US soy market as the very weak Canadian dollar and reports of frost in Alberta gave some support.
Frost was thought to have had only a minimal negative impact on the crop.
Also giving support was talk that at least one cargo of canola was sold overnight with the destination thought to be China. The firm cash market basis was also encouraging, suggesting tight supplies and strong demand despite the harvest activity, brokers noted.

Crushers were strong buyers with exporter pricing noted. Regular Japanese pricing was sidelined by a holiday. The selling came from commercials with elevator companies steady sellers.
Commodity funds were also sellers with traders estimating their selling at 750 – 1,500 Nov contracts.

Western barley ended unchanged to a bit lower with little trade. Late intermonth spreading accounted for the entire trade on Monday.

The lack of interest in the market accounted for the absence of volume as farmers are storing their supplies, hoping for a price bounce.
Buyers were sidelined as they are finding large competing supplies with the overnight frost thought to have caught wheat in a vulnerable stage resulting in larger feed wheat supply, cash traders said.

The total estimated barley volume was 50 contracts, up from Friday’s 8 contracts.

Prices are in Canadian dollars per metric ton: