ICE Canola Falls On Weak US Soy

Canola saw an active
trade with intermonth spreading augmenting activity.

The total canola volume was estimated at 12,502 contracts, up from 9,933 contracts on Wednesday, including an estimated 2,103 contracts involved in the spread trade.

Canola was higher in the overnight market on the firm tone in international vegetable oil markets. Canola held onto its gains as the North American trading began and the CBOT soy complex rallied. However, as the US soy complex faded back and eventually turned lower, it pulled the canola market down. Canola prices ended on its lows as the weak tone in the US soy complex intensified near the close.

Canola was mainly pressured down by the weak tone in CBOT soy complex futures. Contributing to the weakness was the favourable growing conditions in Manitoba and Saskatchewan and the firm Canadian dollar, traders s said. Farmer selling improved as well, although cash dealers still classed it overall as light. "We’re seeing better (farmer) selling out of Manitoba and Saskatchewan after this week’s run up," said a cash trader.
"There’s a lot of interest in pricing out basis contracts," he added.

Underpinning the canola market and holding it firmer than the US market for most of the session was bullish technical signals with technically based traders indicating that price chart patterns suggest the market will climb to the C$460-$465 level.
Lingering weather concerns also gave support as weather forecasts call for temperatures as low as 3 degrees Celsius in the Peace River area and the region around Edmonton in Alberta.

Routine exporter pricing was noted with some light crusher buying appearing. Speculative buying came from commodity funds and commission houses.
Funds are estimated to have purchased 1,000 to 2,000 Nov contracts. The selling comprised of offerings from exporters and elevator companies.

Western barley rallied in light trade. The Nov contract drew the bulk of its support from the lack of selling as demand was lackluster, said brokers.

The total barley volume was estimated at 88 contracts, down from Wednesday’s 196 contracts, including an estimated 20 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: