ICE Canola Falls On Slow Demand, Evening Up

Canola saw a light to moderate trade with intermonth spreading accounting for about a third of the volume as traders feel that commercials have completed their rolling of Jan contracts into the Mar contract ahead of the end of the month when exchange cash month limits come into effect. .

The total canola volume was estimated at 10,942 contracts, down from Monday’s 10,966 contracts, including an estimated 3,114 contracts involved in the spread trade.

Canola was narrowly mixed throughout the overnight session in light volumes amid a lack of strong news. Canola maintained small losses as the North American trading session opened, despite the fact that Chicago Board of Trade soy complex futures opened higher. Canola saw losses for the entire North American trading day with prices ending modestly lower.

Canola was pressured down by sluggish demand as routine exporter pricing was being done on a scale down while crusher demand was virtually non existent, said traders.

Contributing to the losses was evening up as companies and speculators liquidate ahead of the year end.
"Open interest has dropped 8,400 contracts or over 8% in less than a week..certainly suggests we have liquidation happening," said one broker.

Also weighing on the market was the firm Canadian dollar and bearish technical signals as the March contract penetrated support levels.

However, the losses in canola were not as large as the US market as the lack of significant selling and some speculative short covering ahead of the end of the year gave support, analysts said.

Tuesday’s selling comprised of commercial offerings and some speculative selling triggered by bearish technical signals.

Western barley was untraded with prices unchanged to lower.
The fact that cash bids in southern Alberta are below futures prices has limited the interest in the market, brokers said.

Prices are in Canadian dollars per metric ton: