ICE Canola Lower On Weak Vegoils

Canola saw a light trade although overnight volume were felt to be better than recent sessions. The total estimated canola volume at 08:40 CDT was 959 contracts.

Canola was pressured down by the weakness in the overnight oilseed markets with a steep decline in the European rapeseed market and weakness in Malaysian palm oil pressuring the market lower.
The continued firmness of the Canadian dollar, as it hit its highest level against the US currency since October, also weighed on values.

Canola is expected to continue to see losses as the North American trading session gets underway with the Chicago Board of Trade soy complex expected to open lower. Canola is expected to see larger declines than the US market.

Weather forecasts for the prairies call for below normal temperatures this week with single digit lows which is making some traders concerned as the crop continue to be about 2 weeks behind normal in development. However, overall, the weather is favourable for the crop, as long as no frost appears, say traders.

Technically canola is bearish and looks to be starting another leg down, said a broker. Technicians are looking for a test of the significant, mainly psychological, support at C$400/metric ton in the Nov contract.

The main support in the market continues to be the lack of farmer selling as producers continue to be surprised that the canola market has eroded as much as it has considering that the crop is not in the bin and it is definitely showing some problems, said cash dealers.
Cash basis levels are strong with new crop levels about C$40/ton better than traditional levels.

Ideas the market is oversold is also a minor support in canola this morning.

The buying is fairly routine commercial interest with the selling also coming from commercials. Hedge selling has appeared from Europe as it harvests its crop. "That selling started to show up last week", said a trader.

Western barley is untraded and unchanged, but expected to continue to move lower on sluggish demand. There is little fresh news and the market continues to be pressured by imports of about 1.5 mln tonnes of US DDGS, brokers said.

Prices at 08: 40 CDT in Canadian dollars per metric ton: