ICE Canola Lower With Weak Vegetable Oils

Canola saw a very light trade with an estimated 495 contracts traded as of 08:47 CDT.

Canola was pressured down overnight by the weak tone in Malaysian palm oil futures and the losses in the overnight electronic soybean trade.
However activity was very subdued.

Canola was 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. However, activity is expected to be muted as participants worry about frost as western Canadian temperatures have been well below normal.
Weakness in crude oil and the sluggish fresh export demand will contribute to the declines, traders said.

Analysts felt that speculators will likely take another run at trying to close the Nov canola contract under the C$400 level on ideas that fresh fund shorting orders are
resting a "few dollars below $400".

Underpinning the canola market will be technical support as this week’s ability of the market to hold the C$400 per metric ton level in the Nov contract was viewed positively. "As long as Nov soybeans hold above US$9.00/bu, canola will remain above $400," said a trader.

Also supportive will be the lack of farmer selling and the firm tone in the cash markets.
Crushers in Manitoba have a $10.00 premium to futures for old crop deliveries with exporters in Alberta also offering $10.00 over futures for deliveries.

Traders point to the steady rise in open interest in Nov canola as a sign that commercials are steady buyers in the market as they are worried about the sluggish country movement.

The Canadian dollar is weaker this morning and some brokers feel the dollar has topped out and will work lower after hitting its highest level in 10 months on Tuesday. This was felt to be a supportive factor under the market as well.

Western barley is untraded and unchanged with the market expected to be under pressure from the weak tone in feed grain markets and the unaggressive pace of end user demand, brokers said.

Prices at 08: 45 CDT in Canadian dollars per metric ton: