ICE Canola Down On Choppy US Soy

Canola saw moderate volumes with intermonth spreading enhancing the level of activity.
There was some positioning ahead of Tuesday’s US Department of Agriculture supply-demand reports.

The total canola volume was estimated at 9,380 contracts, down from 17,070 contracts on Friday.

Canola was lower in the overnight market, prompted by a weak tone in international vegetable oil markets. Canola maintained its losses as the North American trading session got underway and the CBOT soy complex posted losses.
Canola then closely followed the gyrations in the US soy complex ending the session modestly lower, despite the late lift in CBOT soy at the close.

Canola was pressured down by the lack of confirmed fresh export business as well as the early small losses in CBOT soy complex futures.
Uncertainty about China’s buying intentions in both the US and Canada following the finding of a case of H1N1 flu in the country created some of the choppiness in the market, traders said.

However, giving support were friendly technical signals and ideas that USDA will revise 2008-09 US soybean ending stocks aggressively lower, possibly as low as 125 mln bushels, analysts said. Profitable crush margins and slow farmer selling also gave support. Farmers are focusing on planting and not delivering, although the cool conditions in western Canada have resulted in only small canola planting occurring to date as producers focus on seeding cereal grains.

Crushers were the best buyers with only routine exporter pricing noted. Commodity fund buying was evident early in the North American session with their buying estimated at 300-500 July contracts. The selling was mainly commercial with some light profit taking by speculators also evident.

Western barley ended a bit lower in very light activity. The lack of interest allowed the market to fall in almost no volume, brokers said.

The total barley volume was estimated at 40 contracts, down from Friday’s 53 contracts.

Prices are in Canadian dollars per metric ton: