ICE Canola Drops On CBOT/Equity Losses

Activity was described as sporadic with volumes confined to the nearby November, January and March contracts.

Losses overnight in the e-CBOT soybean complex and in overseas equity markets helped to spark some early selling in canola, brokers said. The losses in canola were amplified with the lower start seen in CBOT soybean and soyoil futures with the start of the North American day session.

Declines in global crude oil contributed to the price weakness seen in canola.

The declines in canola were also being associated with weather outlooks calling for mostly favourable weather conditions for crop development this week, brokers said.

However, there was one dissenting voice as the closely watched forecast from Drew Lerner of World Weather Inc in Kansas City is calling for a heavy frost Thursday in Saskatchewan and possibly into Manitoba.

The downward price action in canola also reflected a drop off in domestic demand, given that crush margins had become less profitable, traders said.

The lack of fresh export demand also weighed on canola futures.

Underpinning canola was the pull-back in the value of the Canadian dollar and the reluctance of producers to deliver canola into the cash pipeline, brokers said.

There were an estimated 5,140 canola contracts traded at 10:59 CDT. Of the contracts traded, 1,286 were spread related.

There were 240 western barley futures traded as of 10:59 CDT. Of the contracts traded, 24 were spread related.

The lack of willing buyers allowed light commercial offerings to push barley futures down, traders said. Weakness in CBOT corn futures also encouraged some selling.

Prices in Canadian dollars per metric ton at 10:59 am CDT: