ICE Canola Undermined By US Soy

Canola saw an active trade with intermonth spreading continuing to account for much of the volume as commercials dominated the spread trade. The outright trading volume was extremely light with traders noting "that if you take away the spread trade, the volumes are pathetic.
We must be into the Christmas doldrums already," said a broker.

The total canola volumes were estimated at 19,630 contracts, down from Wednesday’s 22,267 contracts, including an estimated 17,226 contracts involved in the spread trade.

Canola was lower in the overnight market prompted by a firm tone in the Canadian dollar. Canola continued to see losses as the North American trading session opened, despite the fact the CBOT soy complex was higher. Canola was lower for most of the session ending with just small losses.

Canola was mainly pressured down by the weak tone in the CBOT soy complex with the firm Canadian dollar also a bearish factor, traders said. There was little fresh news to drive the market and declines were small. Uncertainty about canola export sales to China due to Blackleg infestation maintained a bearish mood over the market.

The lack of farmer selling and firm crush margins, as international vegetable oil markets remain strong, helped to support the canola market.
Also giving support was the ability of canola to hold above the C$400/metric ton level in the face of the second largest canola crop on record and the export uncertainties, brokers said.

Canola climbed back to almost unchanged when the CBOT soybean market turned narrowly mixed at the close.

Routine exporter purchases
were augmented by crusher pricing
with speculative buying also evident, according to traders. Commercials provided much of the selling with grain companies steady sellers throughout the session.

Western barley closed mixed in light commercial trade. The lack of country movement accounted for the bulk of the gains in the back months with sluggish end user demand keeping gains very small, brokers said.

Also limiting the firmness in the market and pressuring contracts is the falling open interest as traders noted that interest in the contract is fading and liquidation trade seems to be the "order of the day".

The total barley volume was estimated at 240 contracts, up from 120 contracts on Wednesday with an estimated 50 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: