ICE Canola Lower On StatsCan Rpt, China Talk Offsets

Canola saw a light overnight trade with an estimated 1,237 contracts exchanged as of 08:20 CDT.

Canola was a bit higher in the overnight market reflecting a firm tone in international vegetable oil prices. Canola dropped moderately following the release of the Statistics Canada crop report at 07:30 CDT which showed a larger than expected canola crop. Canola continued to see losses as the market approached the opening of the North American trading session despite expectations for higher Chicago Board of Trade soy complex futures.

Canola is modestly lower on news from StatsCan this morning that the 2009 canola crop was 11.8 mln tonnes, well above trade forecasts that ranged from 10.5 to 11.8 mln tonnes.
There is some scepticism in the trade over the number, however, and the small market decline would suggest that the market is also not convinced of that crop size, traders said.

Underpinning the canola market was expected gains in CBOT soy complex futures and the weakness in the Canadian dollar.
Also giving support is talk that a ship at the west Coast will be loading and carrying canola to China and that this is the start of a major Chinese import program, following the Chinese refusal Oct 20th to accept Canadian canola because of Black Leg contamination.

Farmer selling is also slow and that is also giving some support as is the continued strong crush margins, analysts said.

Generally, traders feel that canola will be lower today on the report, but if the talk about China proves true the expectations are that canola can rally back.

While commercials appeared on both sides of the trade, light commission house selling appeared in the market following the StatsCan report.

Western barley is untraded and unchanged with end user demand just modestly under Wednesday’s close.

Prices at 08:35 CDT in Canadian dollars per metric ton: