ICE Canola Down With Weak US Soy

Canola saw a moderate trade with intermonth spreading augmenting activity.

The total canola volume was estimated at 8,320 contracts, up from Wednesday’s 7,867 contracts, including an estimated 1,894 contracts involved in the spread trade.

Canola was lower in the overnight session as the weak tone in international vegetable oil markets pressured prices down. Canola continued to see losses as the North American trading session began and the CBOT soy complex opened moderately lower. Canola traded lower throughout the session finishing the day with losses.

Canola was pressured down by the weak tone in the US market, particularly soyoil, said traders. They also noted that technical selling is evident in the market. Technicians
stated that the Nov contract has to drop back to "the C$418-$420 level in order to fill in some gaps".

A shift to warmer weather next week also weighed on the market. "It’s not that it is going to get hot, but the lows should at least stay above 10 degrees Celsius," said a trader who added, "this week temperatures got as low as 2 degrees in North Battleford (Saskatchewan). You can’t get much closer than that to frost."

Limiting the price slide was lingering weather uncertainty, slow farmer selling and the weak Canadian dollar.
Continued talk about Chinese and Japanese canola bookings for a Sept through Dec shipping program also gave some support, traders s said.

Exporter and crusher buying met mainly commercial and speculative selling. There was some light elevator company selling and early in the session there had been some European hedge selling, analysts said.

Western barley posted moderate losses in light trade. The market was pressured down by the weak tone in CBOT corn and sluggish end user demand, brokers said.

They did note that there seemed to be some large end user pricing under the market that would likely halt the current price slide as futures have dropped to a discount to the cash market.

The total barley volume was estimated at 88 contracts, up from 35 contracts on Wednesday, including an estimated 24 contracts involved in the spread trade. .

Prices are in Canadian dollars per metric ton: