ICE Canola Edges Down Ahead Of Report

Canola saw a very light trade with almost no intermonth spread activity. Many participants took to the sidelines ahead of the StatsCan production report out tomorrow morning, said brokers.

The total canola volume was estimated at 5,624 contracts, down from Wednesday’s 9,832 contracts, including an estimated 218 contracts involved in the spread trade.

Canola was higher in the overnight trade in the wake of gains in international vegetable oil markets. Canola held onto small gains as the North American trading session opened and then turned choppy and narrowly mixed, mirroring the lackluster choppiness in the Chicago Board of Trade soy complex, traders said. Canola ended marginally lower.

Canola drew small support throughout the session from the lack of farmer selling, lingering concerns about frost and ideas that Friday’s StatsCan report will show a much smaller crop than last year’s record 12.6 mln tonnes.
Traders generally expect to see production fall in the range of 9.5-10.5 mln tonnes.

Capping the advance and eventually sending canola a bit lower was the firm Canadian dollar, bearish technical signals and the favourable weather forecast for the short term, analysts said. "Everyone expects frost to hit the crop this year, but everyday we get by with no significant frost is one day closer to the (canola) crop being made. Environment Canada’s latest outlook is for warmer than normal conditions through September", said a trader.

Routine exporter and crusher buying was augmented by some Japanese pricing. The selling was mainly commercial. Speculators were sidelined ahead of the StatsCan report.

Western barley ended higher in very light trade. The market was lifted by very small end user buying and the lack of country selling as cash dealers noted that farmers are "very disappointed" by the poor cash bids.

The total barley volume was estimated at 45 contracts, up from Wednesday’s 25 contracts, including an estimated 44 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: