ICE Canola Falls On Fund Selling, Rain

Canola saw a moderate trade with intermonth spreading only a minor feature of the activity.

The total canola volume was estimated at 8,529 contracts, up from 670 contracts on Friday, including an estimated 338 contracts involved in the spread trade.

Canola was lower in the overnight session as weakness in crude oil and 14 week lows in palm oil pressured values down. Canola maintained its losses as the North American trading session got underway and Chicago Board of Trade soy complex values dropped.
Canola dropped sharply to its lows in the last 90 minutes of the trading session.

Canola was mainly pressured down by speculative selling as bearish technical signals triggered speculative stop loss orders.
Heavy commodity fund liquidation selling contributed to the price slide. Weakness in CBOT soy complex futures, rain in some of the dry regions of Alberta and sluggish fresh demand undermined values.

Traders noted that end users have taken to the sidelines to see how low canola prices will go.

Underpinning the market was the lack of farmer selling and the weak Canadian dollar.
Ideas that the rain in Alberta was too late for some of the crop also prompted support.

Exporters were the best buyers, although their purchases were in small lots and thought to be pricing old sales. Crusher buying was also noted. There was some light commercial selling in the market but the bulk of the offerings were speculative as commodity funds were the single largest sellers with commission house stop loss selling also noted.
Traders estimated fund selling at 2,000 to 3,000 Nov contracts.

Western barley ended lower in light trade with the weak tone in CBOT corn pressuring the market down in the thin commercial trade.

The total barley volume was estimated at 41 contracts, up from Friday’s 33 contracts.

Prices are in Canadian dollars per metric ton: