ICE review: Canola falls on slow demand
Don Bousquet, Resource News International
Winnipeg, March 26 — Grain and oilseed futures at ICE Futures Canada closed Thursday’s session mixed with canola undermined by sluggish fresh export demand, brokers said.
Canola activity was moderate with many participants on the sidelines ahead of Tuesday’s U.S. Department of Agriculture Prospective Planting report. Spreading accounted for much of the volume with commodity funds and commercials the main participants.
The total canola volume was estimated at 6,620 contracts, down from Wednesday’s 11,539 contracts, including an estimated 3,574 contracts involved in the spread trade.
Canola futures were narrowly mixed in the overnight session in small activity as the firm tone in international vegetable oil prices were balanced off by sluggish demand for canola. Canola maintained its mixed tone as the North American trading session opened. The market ignored the normally dominant U.S. soy complex. Canola ended modestly lower.
Canola was pressured down by slow demand as fresh Chinese interest continues to be at least C$20 per metric ton below the current market. A report from the Chinese Ministry of Commerce that canola/rapeseed imports in April would be only 65,000 metric tons, down from an estimated 160,527 tons in March, further weighed on the market, traders said.
However, giving some support was the lack of farmer selling as the current price bids are unattractive and have kept canola off the market, cash dealers said.
Routine exporter pricing and crusher buying met commercial selling. Light elevator company selling was evident with exporters also sellers. The exporter selling was thought to be liquidation selling, reflecting the slowing export pace, analysts said.
Western barley rallied in moderate trade with intermonth spreading accounting for much of the activity. The gains in barley reflected the lack of farmer selling, strength in Chicago Board of Trade (CBOT) corn futures and ideas that barley acres are going to fall, brokers said.
The total barley volume was estimated at 300 contracts, down from 1,295 contracts on Wednesday, including an estimated 162 contracts involved in the spread trade.
Prices are in Canadian dollars per metric ton:
Price Change
Canola
May 421.10 dn 0.70
Jul 425.50 dn 0.40
Nov 429.60 dn 1.20
Western barley
May 152.50 up 8.50
Jul 159.80 up 8.50