ICE Canola Falls On Harvest Pressure

Canola saw a moderate
trade with intermonth spreading contributing to the volume.

The total canola volume was estimated at 13,712 contracts, up from 11,157 contracts on Thursday.

Canola was mainly a bit lower in the overnight trade on the week tone in e-cbot soybean futures.
Trade as the market came into the North American trading session turned choppy with prices under pressure from a weak opening in Chicago Board of Trade soybeans and the advancing harvest. The market turned higher as CBOT soyoil rallied but canola eventually ended lower as canola futures declined in the last half hour of the session.

Canola rallied early on the improving crush margins prompted by the weak Canadian dollar and steady gains in CBOT soyoil futures, said traders. Also contributing support was some talk of fresh export demand.

Speculative short covering appeared as some speculators wanted to even up ahead of the weekend when a shift in weather forecasts for the US soybean crop could send the markets soaring on Monday, brokers said.
"They learned last Tuesday ,when soybeans rallied almost 75 cents a bushel, that frost is still a big threat to the US crop and they don’t want to risk their profits", said a broker.

However, maintaining selling pressure on the market and eventually sending canola to
losses was the advancing harvest and favourable weather forecast in western Canada into next week. Reports from the field indicate that yields are much higher than expected which has prompted some analysts to revise their canola crop estimates to 11 mln metric tons, compared with the last Statistics Canada forecast of 9.5 mln tons.

Forecasts for frost in western Canada next week were largely ignored on ideas that much of the crop is now past the point of being vulnerable, following 3 weeks of ideal growing conditions, traders said.

Technical signals continued to be bearish, with traders looking for a test of the summer low of C$388.00 in the Nov contract.
A late downturn in CBOT soybeans contributed to the late canola decline.

Crusher and exporter buying was augmented by commission house short covering. The selling came from commercials with elevator companies steady sellers. Commodity fund selling also weighed on the market. Late elevator company selling sent the market down.

Western barley futures ended steady to a bit lower in very light trade. The entire activity comprised of Oct/Nov spreading amid a lack of interest, brokers said.

The total barley volume was estimated at 8 contracts, down from Thursday’s 125 contracts.

Prices are in Canadian dollars per metric ton: