ICE Canola Mostly Lower As CBOT Gains Erode

Activity was described as volatile with some evening up of positions evident ahead of Friday’s crop production update from Statistics Canada.

Statistics Canada will release its first production estimates of the crop year on Friday. Average trade estimates for the canola crop currently range from 9.5 million to 10.5 million metric tons, which would be well below the 12.6 million tons grown in 2008/09 (Aug/Jul).

Malaysian palm oil and European rapeseed contracts posted advances in overnight trade, which lent some support to canola. Calls for a firmer start in the CBOT soy complex, along with gains in crude oil, also generated some early strength in canola, brokers said.

The pricing of old export business contributed some support as did the abse4nce of farmer deliveries into the cash pipeline

The upside in canola was offset when CBOT soybean and soyoil values began to move lower, traders said.

The absence of a frost threat in western Canada was helping to spark some selling interest, although participants remained hesitant to take too much of the weather premium out of the price of canola, brokers said.

A drop off in demand from domestic processors also helped to weigh on some contracts, traders said. Crush margins for processors were said to have declined to their lowest level since late July.

There were an estimated 3,751 canola contracts traded at 11:02 CDT. Of the contracts traded, 162 were spread related.

There were no western barley futures traded as of 11:02 CDT.

Prices in Canadian dollars per metric ton at 11:02 am CDT: