ICE Canola Falls On Fading Demand

Canola saw very small outright activity with the bulk of the volume comprised of intermonth spread trade as commercials and speculators were rolling positions. "Outright trade was only a bit more than 1,000 contracts, this is unbelievably poor," said a trader.

The total canola volume was estimated at 17,750 contracts, down from Friday’s 20,968 contracts, including an estimated 16,412 contracts involved in the spread trade.

Canola was lower in the overnight session, prompted by weakness in international vegetable oil markets. Canola continued to see small losses as the North American trading session got underway and the Chicago Board of Trade soy complex posted small declines. Canola continued to be lower most of the session with occasional choppiness noted, despite a rally in the CBOT soybean market. Canola ended with small declines.

Canola was pressured down by the ample canola supply in western Canada, a firming tone in the Canadian dollar and slowing demand as we head into the Christmas doldrums.

However losses were small as farmer selling was very light. Frigid temperatures across western Canada have resulted in canola being locked away in the bin, said cash dealers. They also noted that " when its -35 Celsius, C$9.00/bu canola is not going to get farmers delivering."

The firm tone in CBOT soybean futures and steady, if unaggresive commercial demand, is underpinning the market and helping to keep the declines small.

Routine exporter buying was augmented by some crusher pricing and speculative buying. The selling was mainly commercial.

Western barley ended higher in light trade. The lack of farmer selling, due to the cold conditions, and increased end user demand, as the cold conditions are stimulating livestock ration usage, accounted for the gains, brokers said.

The total barley volume was estimated at 100 contracts, up from 47 contracts traded on Friday.

Prices are in Canadian dollars per metric ton: