ICE Canola Down On C$ Gains, Slow Demand

Canola saw a moderate trade with intermonth spreading contributing to the volume. Activity was felt to be normal for the holiday season as trading volumes wind down. ICE Canada will be closed on Friday and Monday for the Christmas break.

The total canola volume was estimated at 12,923 contracts, up from Tuesday’s 10,936 contracts, including an estimated 5,350 contracts involved in the spread trade.

Canola was mixed in the overnight trade with the market seeing gains early and then fading as vegetable oil market eased. Canola was lower as the North American trading session opened and canola ignored opening gains in the Chicago Board of Trade soy complex. Canola ended the day lower in light trade.

Canola was pressured down by the very strong Canadian dollar and fading demand, traders said. Crush margins have seen a large erosion in the past week as the rising Canadian dollar and falling soy product prices have cause crush profitably to fade.

News that an ADM crusher in eastern Canada had its canola meal shipments to the US halted because of salmonella contamination also weighed on the market. Bearish technical signals contributed to the weakness in the market with technicians looking for the Mar contract to test support at the C$400 level.

Giving some support was the firm tone in CBOT soybean futures and slow farmer selling.

Exporter and light crusher scale down buying was augmented by some resting Japanese pricing orders, despite the fact that Japan is closed for a holiday today, said brokers. The selling was a combination of commercial and speculative.
Commodity funds were sellers in the Mar contract.

Western barley ended the day mixed with prices little changed in light activity. The bulk of the volume comprised of end of month positioning with little interest in the market otherwise, said brokers.

The total barley volumes were estimated at 55 contracts, up from no trade on Tuesday.

Prices are in Canadian dollars per metric ton: