ICE Canola Falls On Weak US Soy

Canola saw a moderate trade with only light intermonth spreading.

The total canola volume was estimated at 11,097 contracts, up from Wednesday’s 9,147 contracts, including an estimated 1,420 contracts involved in the spread trade.

Canola futures were mainly lower in the overnight market reflecting the weakness in the international vegetable oil markets and the unexpected increase in Chinese interest rates which could cut into demand for oilseeds, traders said. Canola continued to see losses as the North American trading session got underway.
Canola finished lower.

Canola was pressured down by the steep slide down in CBOT soy complex futures, increasingly bearish technical signals and the uncertainty about Chinese canola buying, traders said.

Speculative selling was also encouraged by ideas that the US soybean market could drop below US$10/bushel following Tuesday’s USDA report which is expected to confirm a large US soybean supply.

Canola’s losses were not as large as the US soy market as the weaker Canadian dollar and a slower pace to farmer selling gave some support, traders said. They also noted the decline in soybeans was also meal driven and that has a limited negative impact on canola, because of canola’s high oil content.

Exporters were steady buyers, pricing both old and fresh sales, while crushers were only light buyers today. The selling comprised of commercial offerings and speculative selling. Much of the speculative selling was profit taking prompted by the weak tone in the US market, brokers said.

Western barley was unchanged in light commercial trade. However, volumes were too small to be considered significant, brokers said.

The total barley volume was estimated at 2 contracts, down from 30 contracts on Wednesday.

Prices are in Canadian dollars per metric ton: