ICE Canola Lower On Firm C$, Technical Selling

Canola saw a light trade focussed in the Nov contract with an estimated 737 contracts traded as of 08:44 CDT.

Canola was pressured down by the continued firm tone in the Canadian dollar as it hit 10 month highs this morning against the US dollar.
A continued technical based challenge of support at the $400 per metric ton level in the Nov contracts also weighed on the market.
Contributing to the slide was further weakness in the European rapeseed market with harvesting advancing in the Ukraine and Europe, traders said.

Traders are expecting to see canola under pressure as the North American trading session gets underway.
Expected strength in Chicago Board of Trade soy complex futures will give support, but traders are divided on whether it will be enough to offset the technically driven test of the support in Nov canola. In addition further European hedge selling is expected to weigh on the market.

Contributing to the weakness will be the absence of significant fresh demand. Reports this morning out of China and Japan both suggest reduced crushing of rapeseed and that will weigh on the market.

Weather is favourable for the canola crop although many traders noted that morning lows are getting "uncomfortably" close to the freezing point with overnight temperatures as low as 5 degrees Celsius reported at several points on the prairies.

"I think if we see the Nov (canola contract) hold $400 we could see a nice bounce higher, " said a trader.
He added that canola is definitely oversold after hitting its lowest level since the winter.

Further support will come from the lack of farmer selling and gains in international vegetable oil markets with Malaysian palm oil higher in the overnight trade, brokers said. In addition the Canadian dollar gains have faded with the dollar now a bit lower.

Western barley futures are lower this morning in light trade with the market pressured down by sluggish demand with end user bidding still under the market, traders said.

There was little fresh news to drive the market with the firm Canadian dollar a bearish influence as it makes US feed ingredient imports from the US cheaper, said brokers. Traders expect barley prices will see small declines today.

The total barley estimated volume at 08:42 CDT was 5 contracts.

Prices at 08: 43 CDT in Canadian dollars per metric ton: