ICE Canola Down On Weather, US Soy Plunge

Canola saw an active trade with intermonth spreading evident in the market.

The total canola volume was estimated at 15,270 contracts, up from Monday’s 11,770 contracts, including an estimated 4,626 contracts involved in the spread activity.

Canola was lower in the overnight trade on weakness in international vegetable oil prices and some European hedging of its record large crop. Canola continued to see declines as the North American trading session got underway and the Chicago Board of Trade soy complex briefly rallied and then turned lower. Canola saw losses for the entire session ending lower.

Canola was pressed down by the steep slide in CBOT soy complex futures and the near ideal weather for the crop.
Forecasts call for warm dry conditions through the end of next week for much of western Canada. Also weighing on the market was concern that financial problems in China could lead to cancellations of some canola export sales, said traders.

Bearish technical signals weighed on the market as did seasonal trends as canola prices tend to fall in September, said traders. Early stages of the harvest also added pressure to the market. Export demand continued to be slack as exporters are waiting for the harvest to further pressure the market down before buying.

Giving some support and keeping canola losses smaller than the US market for most of the day was the weakness in the Canadian dollar and slow farmer selling. The lateness of the canola crop was also a minor supportive factor, traders said.

Exporter and crusher buying met elevator company and commercial selling. European selling was also evident early. Funds appeared on both sides of the market with some speculative stop-loss selling triggered late in the session.

Western barley ended lower in active trade. The weak tone in US corn, the advancing barley harvest in western Canada and bearish technical signals weighed on prices, brokers said. However, the price slide did attract in some end user demand, they added.

The total barley volume was estimated at 1,070 contracts, down from 1,089 contracts on Monday, including an estimated 590 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: