ICE Canada Grain Review: Canola Losses Limited By US Soy Rally

WINNIPEG (Dow Jones)--Grain and oilseed futures at ICE Futures Canada closed Wednesday's session lower, with canola down only modestly in the actively traded contracts as the advancing harvest weighed on prices. Canola's downward movement was limited by a rally in Chicago Board of Trade soy complex futures, brokers said.

Canola saw moderate trade, with intermonth spreading by index funds accounting for a significant amount of the volume. Positioning was also evident ahead of Friday's Statistics Canada crop production report.

Total canola volume was estimated at 13,881 contracts, down from Tuesday's 25,740 contracts.

Canola saw choppy trade overnight, trading around Tuesday's close. Prices then turned lower following the release of the bearish U.S. Department of Agriculture grain stocks report Wednesday morning. Canola continued to see losses as the North American trading session got under way and the CBOT soy complex posted losses. Canola ended the session with small losses.

Canola was pressured down by the advancing harvest as steady country movement weighed on prices as did expectations for a large canola crop, traders said. Friday's Statistics Canada crop report is expected to show a larger canola supply, but will not show the full extent of the larger crop because the report was taken too early in the month, which saw exceptionally favorable growing weather, said analysts. The firm Canadian dollar and bearish technical signals contributed to the weakness.

Giving support and keeping the losses modest was the firm tone in CBOT soy complex futures and a slower pace to farmer selling as cash bids hit the lowest level of the year in several areas of western Canada.

Japanese pricing and routine exporter buying was augmented by increased crusher demand. The selling came from commercials and elevator companies. Commodity fund selling was evident in the January futures, as funds start to create a short position in that contract in addition to their short position in the November contract.

Western barley ended lower in light commercial activity. The advancing harvest and ample barley supply weighed on prices, analysts said. Cash traders noted that Wednesday's activity in futures brings the market in line with the southern Alberta cash market.

Total barley volume was estimated at 122 contracts, up from Tuesday's 21 contracts.

Prices are in Canadian dollars per metric ton:

         Price   Change 
Canola 
Nov      379.60   dn 0.10 
Jan      386.00   dn 0.20 
Mar      388.00   dn 0.30 
 
Western Barley 
Nov      148.00   dn 2.00 
Jan      156.00   dn 2.00 
 

Intermonth spread prices and trading volumes are not available Wednesday.

-By Don Bousquet, contributing to Dow Jones Newswires; 204-947-1700 resnews@shawbiz.ca

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(END) Dow Jones Newswires

September 30, 2009 15:02 ET (19:02 GMT)


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