ICE Canola Drops On Slowing Demand

Canola saw a moderate trade with only light intermonth spreading evident.

The total canola volume was estimated at 12,659 contracts, down from Thursday’s 11,084 contracts, including an estimated 2,342 contracts involved in the spread trade.

Canola was lower in the overnight session as weakness in international vegetable oil prices weighed on values. Canola maintained its losses as the North American trading session got underway and the CBOT soy complex opened lower. Canola ended the session lower.

Canola was pressured down the weak tone in CBOT soy complex futures and sluggish demand. The lack of fresh exports weighed on prices as did the scale down nature of the export pricing. Crush margins eroded during the session and that sidelined crusher pricing. The firm Canadian dollar was also a bearish feature of Friday’s trade, said analysts.

Bearish technical signals prompted increased speculative selling.
Farmer selling also accelerated as cash dealers noted that milder temperatures and cash flow needs stimulated increased country movement.

Limiting the price slide was short covering at the C$400/metric ton level in the Mar contract.

Exporter scale down buying was augmented by light crusher pricing. The selling came from commercials, speculators and farmers.

Western barley ended lower in light trade. Sluggish demand for feed grains weighed on values, but was partially balanced off by the lack of farmer selling, brokers said.

The total barley volume was estimated at 135 contracts, up from only 2 contracts on Thursday.

Prices are in Canadian dollars per metric ton: