ICE Canola Lower On Improving Crop

Canola saw a light trade with intermonth spreading augmenting activity.

The total canola volume was estimated at 6,451 contracts, down from Thursday’s 9,249 contracts, including an estimated 2,050 contracts involved in the spread trade.

Canola was lower in the overnight session on follow through selling from this week’s weak tone in canola and on the firm Canadian dollar. Canola continued to see losses as the North American trading session got underway and Chicago Board of Trade soy complex futures opened lower. Canola moved to its lowest level since March in the last 2 hours of the session.
Canola ended moderately lower.

Canola was pressured down by the weakness in CBOT soy complex futures, the early firm tone in the Canadian dollar, bearish technical signals and ideas that the canola crop is improving.

Traders stated that all provincial crop reports this week noted that canola crops have improved.
Some private trade assessments are also indicating that the canola crop "is in better shape than you might expect" after its poor start due to adverse weather. "I don’t think we will see the record yields of the past two years, but I think that yields are going to be much closer to average than many people expect," said an analyst.
"The main problems for the crop is that it is about 2 weeks
late in development", he added.

Demand was also sluggish with export demand slow and crusher demand fading as crush margins are poor. The buying was all on a scale down, said traders. "There was some year end farmer selling in today’s market", cash dealers said.
Although they still classed overall farmer selling as light.
July 31st is the end of the crop year in western Canada.

Underpinning the market were ideas the market was oversold and due for a bounce higher.

Japanese scale down buying was augmented by routine exporter interest and light crusher pricing, said traders. The selling came from both commercials and speculators. Crushers were steady sellers with commodity fund selling noted, although it was in small quantities. Commission houses were also sellers.

Western barley ended
moderately lower in very light trade. Activity in the Oct contract was felt to be liquidation. In the Nov contract end user bids were well under the market as barley cash prices have fallen off "to the $170-$172" per metric ton level, said a cash trader.

The total barley volume was estimated at 46 contracts, down from 104 contracts on Thursday.

Prices are in Canadian dollars per metric ton: