ICE Canola Mostly Lower On Slowing Demand

Canola volumes were moderate to active with intermonth spreading augmenting trade.

The total canola volume was estimated at 13,701 contracts, up from Friday’s 10,513 contracts, including an estimated 4,690 contracts involved in the spread trade.

Canola was higher in the overnight market reflecting the firm tone in international oilseed prices. Canola held onto its gains as the North American trading session got underway and the Chicago Board of Trade soy complex rallied sharply. However as the US market started to fade back, selling developed in canola that sent the most actively traded contracts lower.

Canola was pressured by sluggish fresh demand with both crushers and exporter interest slowing. Canada’s main customer, Japan, is closed this week for the Golden Week holiday. Also limiting interest is a slower pace to Chinese buying as their rapeseed harvest moves into full swing.

The very strong Canadian dollar was a bearish feature as was improved weather across western Canada for planting.
Farmer selling was steady as farm gate bids rose to and above the significant C$10.00/bu level in much of western Canada. Rising levels of canola in commercial hands, confirmed by Friday’s Canadian Grain Commission weekly report, also pressured the market.

Giving some support was the firm tone in CBOT old crop soybeans, soyoil futures and the strong export lineup for May.
Friendly technical signals also prompted some speculative buying.

Crushers were the best buyers with routine exporter pricing noted.
Commodity funds were thought to be buyers in the July contract.
The selling was commercial with elevator company pricing evident.

Western barley closed little changed in light commercial trade. The market was undermined by slack demand amid a lack of interest in the market, brokers said,.

The total estimated barley volume was 4 contracts, down from Friday’s 200 contracts.

Prices are in Canadian dollars per metric ton: