ICE Canola Falls As Funds Start Selling

Canola saw a very light trade with an estimated 4,915 contracts traded as of 11:19 CDT. Analysts felt the low volumes reflected the uncertainty over the canola crop condition and the upcoming long weekend in Canada.

Canola was pressured down by the weakness in Chicago Board of Trade soy complex futures and the large slide in European rapeseed prices overnight.
Contributing to the weakness was slack demand as the firmness of the Canadian dollar has limited interest in canola, said exporters.

Adding to the weakness was commodity fund selling as they initiated a short position in canola as the Nov contract penetrated strong support at the C$400 level.
"Funds are short over 40,000 contracts of soyoil and they have just been waiting for canola to break below $400 (in the Nov contract) to start selling here," said a trader. However, another trader noted that Nov canola will have to close below $400 to encourage further fund selling.

Giving some support was light farmer selling and steady commercial demand.

Crushers and the Japanese have been the best buyers while the selling has come from exporters, elevator companies and commodity funds. Traders estimated fund selling at 500-700 Nov contracts.

Western barley posted losses in very light activity. The weak tone in CBOT corn and the lack of aggressive end user demand allowed prices to post losses, brokers said.

The total estimated barley volume as of 11:18 CDT was just 5 contracts.

Prices at 11:18 CDT in Canadian dollars per metric ton: