ICE Canola Lower On Weak Outside Markets

Canola volumes were strong with intermonth spreading accounting for much of the trade.
As of 08:20 CST, total estimated canola volumes were estimated at 6,359 contracts.

Canola was pressured down by weakness in the overnight international vegetable oil markets including e-cbot soy complex futures. All markets were responding to the strong US dollar, said traders. Canola is expected to remain under pressure as the North American trading session opens and the Chicago Board of Trade posted losses.

Canola also noted some selling from fading demand as we enter the Xmas season and from the large supplies of canola in western Canada.

Underpinning the market was the steep decline this morning in the Canadian dollar and slow farmer selling, said brokers.

Technical traders said that the charts are still friendly despite the inability of the market to penetrate the C$415 per metric ton level in the Jan contract.

Several traders felt that canola could still move higher today after a weaker opening and they also indicated that they would not be surprised if the US soybean market and soyoil market could rally.
"The (US) dollar is the bad news for those markets (soybeans and soyoil), but if you look at this morning’s weekly (USDA) export numbers the demand is exceptional".

Traders generally concede that the market is moving into a seasonal quiet time as the markets are dominated by holidays.
"The next two weeks are going to be pretty dead ", said a trader "and I think any big moves in these markets are going to wait for the new year".

Commercials were the main traders in the outright trade with some speculative activity noted.

Western barley is untraded and unchanged amid a lack of interest.

Prices at 08:32 CST in Canadian dollars per metric ton: