ICE Canola Lower With US Soy

Canola saw a light to moderate trade with moderate intermonth spreading evident in the volumes. Traders were surprised at the low volumes with one trader noting that "with all the crop uncertainty you would think there would be more activity here (in canola).
US markets are seeing pretty good volumes." Another stated that "the (ICE) exchange must be concerned about this low level of activity.
They always say they need 10,000 contracts a day to meet their costs."

The total canola volume was estimated at 6,748 contracts, up from Monday’s 6,284 contracts, including an estimated 2,364 contracts involved in the spread trade.

Canola prices were lower in the overnight session, reflecting the weakness in international vegetable oil prices. Canola maintained its losses as the North American trading session got underway and the CBOT soy complex saw declines. Canola ended just modestly lower.

Canola was pressured down by the early steep retreat in CBOT soy complex futures and the favorable canola crop outlook.
Weather forecasts are calling for near ideal growing conditions in western Canada through the end of the month, prompting selling. Demand was sluggish with only routine export interest noted.

However, canola’s decline was much smaller than US soybeans as the Canadian dollar, which had started the day sharply higher, weakened to small losses and that gave solid support to canola. The lack of farmer selling, the ability of the market to hold technical support levels and the lingering crop uncertainty also gave support.

"This (canola) market is finding good support at the bottom level of its trading range and that is helping us to keep canola from mirroring the US (soybean complex) collapse," said a broker.

Routine exporter and crusher scale down buying was augmented by some Japanese pricing. There was also some speculative short covering in the market, a trader said. The selling was mainly commercial although there was some light speculative selling evident as well.

Western barley ended lower in light commercial trade.

The Oct contract was pressured down by liquidation trade, said traders. The Nov contract was undermined by the sharp losses in US corn, the improving crop outlook and talk that feed wheat and feed barley prices will be lowered in the Canadian Wheat Board Pool Return Outlooks on Thursday, brokers said.

The total barley volume was estimated at 88 contracts, up from 30 contracts on Monday.

Prices are in Canadian dollars per metric ton: