ICE Canola Falls In Dull Trade

The canola volume was light to moderate with intermonth spreading enhancing the trade. Traders generally described activity as lackluster.

The total canola volume was estimated at 9,057 contracts, down from 9,272 contracts on Thursday, including an estimated 4,122 contracts involved in the spread trade.

Canola was mainly a bit higher in the overnight market, reflecting the firm tone in international oilseed markets. Canola held onto its gains as the North American trading session got underway and the Chicago soy complex rallied. However, activity was muted as prices turned lower led by moderate declines in the July contract. Canola closed mainly lower.

Canola was pressured down by weakness in the CBOT soyoil market, the firm Canadian dollar, sluggish demand and eroding crush margins, traders said. The weak crush pace in Friday morning’s Canadian Oilseed Processor Association weekly report contributed to the decline.

The July contract saw the biggest decline as participants exited the contract ahead of next week when July becomes the cash month and exchange imposed position limits come into effect.

The market drew some support from the continued crop problems and weather forecasts that contain little badly needed moisture in Alberta. However, traders feel that the current dryness problems are priced into the market, until the actual extent of the crop losses are known.

Farmer selling is slow as the crop problems have caused them to back away from marketing, but that is being offset by the slack pace to the demand side of the market, analysts said.

Routine end user pricing met commercial selling with liquidation continuing in the July contract.

Western barley ended a bit higher in light trade. Trade in the old contracts was limited to intermonth spreading.
The newly revised contracts saw only small volumes on Friday.

The Nov futures contract were undermined for most of the session by the fact that cash bids are under futures values. However the lack of selling forced light end user bidding at the close to lift prices,
brokers said,

The total barley volume was estimated at 81 contracts, down from Thursday’s 173 contracts, including an estimated 64 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: