ICE Canola Edges Down On Farmer Selling

Canola saw a heavy trade with moderate amounts of intermonth spreading.

The total canola volume was estimated at 16,583 contracts, up from 16,128 contracts on Wednesday, including an estimated 6,838 contracts involved in the spread trade.

Canola was lower in the overnight market, prompted by the weak tone in international vegetable oil prices. Canola maintained its losses as the North American trading session got underway and CBOT soybeans saw small declines. However, US soybeans turned choppy and eventually rallied and that supported canola for most of the session. Canola turned modestly lower at the close on increased elevator company selling.

Canola drew the bulk of its support for the session from the firm tone in CBOT soybean futures and the very weak Canadian dollar. However, the canola gains were much smaller than the US soybean market for most of the session with canola turning a bit lower at the close as elevator company selling weighed on the market.

Heavier farmer selling was noted as cash bids touched C$9.00/bu at many points across western Canada triggering country movement. Ideas that canola was overbought and due for a correction lower also pressured the market.

Sluggish export demand and the lingering uncertainty about Chinese canola demand in 2009-10 also restrained the advance in canola. Uncertainty about the crush pace this year due to the problem with salmonella in canola meal that has halted Canadian canola meal shipments into the US also pressured the market.

Routine exporter and crusher buying was augmented by speculative buying. The selling came from commercials with elevator company selling notably heavier.

Western barley futures were untraded and unchanged amid only limited interest.

Prices are in Canadian dollars per metric ton: