ICE Canola Falls With Global Commodity Sell-off

Canola saw a moderate trade with light intermonth spread activity noted.

The total canola volume was estimated at 7,811 contracts, down from Friday’s 9,756 contracts, including an estimated 1,394 contracts involved in the spread trade.

Canola was lower in the overnight session reflecting the losses in the e-cbot soybean market and the general sell-off in equity and commodity markets. Canola continued to see moderate declines as the North American trading session got underway and the Chicago Board of Trade soy complex dropped sharply. Canola ended the day with sharp losses.

Canola was pressured down by the weakness in CBOT soy complex values with canola moving to its lows in the last half hour of trade. Also weighing on the market was bearish technical signals and eroding crush margins, analysts said.

Weather was a mixed factor as most forecasters are calling for favourable growing conditions this week, after no significant frost appeared on the weekend. However, as the session wore on a few private forecasters started to include some frost in the their outlooks for Saskatchewan over the next week and that underpinned the market.

Helping to keep canola losses smaller than the US soy complex sell-off for most of the trading session was the very weak Canadian dollar and the lack of farmer selling, traders said.

Exporter scale down buying was augmented by some light crusher pricing. The selling comprised mainly of speculative offerings with some light elevator company and commercial selling noted. Commodity funds were noted sellers and were estimated to have sold 1,500 Nov contracts.

Western barley ended lower in moderate trade. The weak tone in CBOT corn weighed on prices as did the lack of end user demand. Traders are indicating that there has been a fairly active import pace for US Distilled Dried Grain products into southern Alberta in the past two weeks. They indicate that many feed lots are covered through Jan and that has cut into demand for barley.

The total barley volume was estimated at 319 contracts, up from 50 contracts on Friday, including an estimated 76 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: