Winnipeg, MB, Sept. 3, 2014

ICE Futures Canada canola contracts were weaker on Wednesday, as selling in the CBOT soy market spilled over to weigh on prices.

The US soybean crop was rated 72% good-to-excellent in the latest weekly USDA report, which was an improvement of two points from the previous week and well ahead of historical averages for this time of year. The resulting losses in soybeans were more than enough to keep canola pointed lower as well, despite any concerns with the Canadian crop.

A firmer tone in the Canadian dollar, which increased by nearly half a cent relative to its US counterpart, was also bearish for canola, said participants.

However, forecasts calling for wet weather across much of Western Canada over the next two weeks did limit the downside in canola, as the precipitation should delay harvest operations and could lead to some quality downgrades. The risk of frost is also increasing across the Prairies moving into September.

Technical support did hold to the downside, with some traders of the opinion that canola was starting to look oversold at current levels.

About 26,296 canola contracts were traded on Wednesday, which compares with Tuesday when 27,066 contracts changed hands.

Milling wheat, durum, and barley were all untraded.

Settlement prices are in Canadian dollars per metric ton.

                          Price      Change
Canola            Nov     418.40    dn 6.10
                  Jan     424.20    dn 6.50
                  Mar     430.40    dn 6.00
Milling Wheat     Oct     202.00    unch
                  Dec     207.40    unch
Durum             Oct     250.00    unch
                  Dec     256.00    unch
Barley            Oct     125.00    unch
                  Dec     127.00    unch

Phil Franz-Warkentin, Commodity News Service