ICE rapeseed values follows the drop of US soy market

Rapeseed contracts traded on ICE Futures Canada were lower in overnight activity. The general weakness in vegetable oil markets that started Monday as a result of the USDA plantings and stocks report spilled over into the overnight session and continued to pull rapeseed values lower, market watchers said.

The e-CBOT soy complex posted steep declines overnight in the wake of the USDA prospective planting report that forecast a substantial increase in soy acreage for the coming crop year. A bearish stocks report also weighed on the US soy complex.

Rapeseed values also moved lower in response to significant softness in Malaysian palm oil and European Matif rapeseed values, traders said.

The soft tone in edible oil markets is expected to continue for the remainder of the day, with both CBOT soy and soy oil expected to post steep declines at the start of North American trade in Chicago.

Brokers say they expect rapeseed to move lower at that point, but noted that the overnight losses in rapeseed were far below those seen in soy, leading to talk of fresh export business. Those rumours however, have not been confirmed.

Farmers are believed to have backed away from the market for the time being given the steep value declines in recent sessions and that may also help to limit rapeseed's downside potential, traders said.

Overnight interest in rapeseed was decent given the volatility in the market. At 8:50 a.m. CDT, 3,665 contracts had been traded.

Western barley futures meanwhile, were mostly lower overnight. As of 8:50 a.m. CDT, 216 contracts had changed hands.