Canada canola sinks as U.S. soy sees good weather

WINNIPEG, Manitoba (Reuters) - Canadian canola futures hit six-week lows on Friday as good growing conditions for U.S. soybeans pressured vegetable oil markets, and as funds continued to liquidate long positions in canola, traders said.

"These fancy prices are not holding. We're coming down pretty fast," a canola trader said.

ICE canola futures settled $12 to $18.80 per ton lower, with benchmark November down $18.70 at $634.60.

November prices have dropped 12 percent from a recent high set two weeks ago.

Commission houses and funds were featured sellers, traders said. Commodity funds are close to liquidating their long position in the market, traders believed.

Routine exporter and crusher buying helped pare losses. "We outpaced (U.S. soybeans) on the downside by a little bit today, but not by much," a trader said.

At the Chicago Board of Trade, August soybeans ended 51 U.S. cents per bushel lower at $14.70, and August soyoil was down 1.33 U.S. cents per pound at 62.09 U.S. cents.

An estimated 100 November/July spread traded from $11.60 to $12.

Volume was estimated at 6,996 contracts, up from 6,008 on Wednesday.

In canola options, 50 November $630 puts traded from $33.40 to $33.80.

Barley futures were lower on long liquidation in sympathy with weak U.S. corn, a trader said. October barley was down $4.40 per ton at $253.40 and December down $5.80 at $261.

An estimated 35 October/December spread traded from $7.50 to $8.90.

Volume was 317 contracts, up from 255 on Thursday.

(Reporting by Roberta Rampton; Editing by Christian Wiessner)