ICE Canola Mixed, Nearby Down On Month End

Canola saw a light trade focussed in the July and Nov contracts as 703 contracts had traded by 09:35 EDT. Activity is expected to be muted ahead of the June 30th US Department of Agriculture grain stocks and acreage reports. The trading week is also shortened as ICE Canada will be closed on Wednesday for Canada Day while the Chicago Board of Trade will be closed on Friday for the US Independence Day weekend.

Canola tended to ignore the outside markets in overnight trade and react to month end positioning, analysts said.
Liquidation selling in the July sent the contract moderately lower and that pulled down the Nov contract.

Canola is expected to rebound and
see
small gains as the North American trade gets underway.
While canola will draw some small support from an expected firm tone in the US market, US market strength is not expected to be vibrant enough to shake off the liquidation selling ahead of July becoming the cash month later this week which will keep canola under downward pressure, said traders.

However the market should turn higher, traders said,
as weekend weather was supportive.
Light showers in the Edmonton area and in eastern Alberta into the Kindersley region of Saskatchewan have not alleviated drought, but given the crop a "one or two day" reprieve said traders. They also
noted that the heavy soaking rain of up to 5 inches in Manitoba has caused significant problems for the Interlake crop and will create some excess moisture problems for crops in other areas of the province.

Also boosting the market will be the slow farmer selling, although that will continue to be offset by the sluggish demand picture as both crushers and exporters have been unaggressive buyers in the new crop as they assess crop size.

Technically the July contract chart is now showing bearish signals following recent declines while the Nov contract remains in a sideways pattern. Seasonally the market normally enters a downtrend at this time.

Western barley is expected to be under some selling pressure in the new crop barley contracts as weakness in US corn and ideas that barley has gotten ahead of itself as prices top $200 in Nov and Jan contracts will weigh on prices. The main support, say brokers, will come from the lack of farmer selling as they sit on supplies trying to assess the poor crop outlook.

As of 09:35 EDT, no barley contracts had traded and prices were unchanged.

Prices at 09:56 EDT in Canadian dollars per metric ton: