ICE Canola Mixed, Weather Supports

Canola saw an active trade with much of the volume comprised of intermonth spreading by commodity funds and commercials.

The total canola volume was estimated at 21,781 contracts, up from Monday’s 14,796 contracts, including an estimated 16,118 contracts involved in the spread trade.

Canola was lower in the overnight market reflecting the weakness in international vegetable oil prices. Canola maintained those losses as the North American trading session got underway and the CBOT soy complex posted declines. Canola continued to trade lower through the day, ending narrowly mixed in an increasingly choppy trade on weather concerns.

Canola was pressured down for most of the session by ideas that Monday’s large rally was overdone and the weak tone on Tuesday in the US market. Contributing to the weakness was the firm Canadian dollar and the slowing pace to demand from both exporters and crushers, traders said.

Restraining the weakness and pulling the market back to a narrowly mixed close in the last 45 minutes of activity
was concern about cold conditions in western Canada. Frost was reported in both Alberta and Saskatchewan Monday night with more frost forecast across western Canada through the end of the week. Talk that the cold conditions and late planting will result in lower than average yields generated some buying. Farmer selling was slow as cash bids have dropped to unappealing levels with the weather uncertainties encouraging producers to "lock their bins", said cash dealers.

Routine exporter and crusher buying met commercial selling.

Western barley ended higher in moderate trade with intermonth spreading accounting for much of the volume. The lack of farmer selling, concern about the cold conditions and ideas that barley is undervalued against US corn supported values.

End user demand met commercial liquidation selling.

The total barley volume was estimated at 559 contracts, down from Monday’s 1,534 contracts, including an estimated 118 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: