ICE Canola Plunges With US Soybeans

Canola saw moderate volumes with intermonth spreading accounting for much of the activity.

The total canola volume was estimated at 13,882 contracts, down from Friday’s 14,991 contracts, including an estimated 8,402 contracts involved in the spread trade.

Canola was lower in the overnight market reflecting weakness in outside markets and lower international vegetable oil prices. Canola continued to see moderate declines as the North American trading session got underway and the Chicago soy complex posted large losses. Canola’s losses increased as the session progressed and the market ended moderately lower.

Canola was pressure down by the big slide in the US soybean market with the market further undermined by the lack of fresh export demand and bearish technical signals. Farmer selling accelerated, triggered by the prices slide of almost C$25 per metric ton since the May highs, cash dealers said. The price decline triggered sell stops as well.

Underpinning the market and keeping the canola decline smaller than the US market was a sharp loss in the Canadian dollar against the US currency and continued production uncertainties because of inclement weather in May and June, analysts said. Only partially offsetting that was the improved weather this week, they added.

Routine exporter and crusher buying met mixed selling with exporter selling noted along with increased elevator company offerings. Commodity fund profit taking selling was estimated at 1,000 – 1,200 Nov contracts while commission house selling was also triggered by the decline.

Western barley futures ended a bit lower but were only lightly trade with intermonth spreading accounting for the overwhelming bulk of the activity. "There was only one contract traded outside of the (intermonth) spread, so the price is pretty meaningless", said a trader.

The total barley volume was estimated at 21 contracts, down from Friday’s 32 contracts, including an estimated 20 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: