ICE canola futures hit by weakness in Chicago soyoil

WINNIPEG, Manitoba, June 2 (Reuters) - ICE canola futures succumbed to the downdraft from Chicago soyoil on Monday, dropping beneath $700 for the first time in over a month.

• July canola RSN5 settled down $24.50 at $686.60 per metric ton. November RSX5 settled down $20.70 at $667.90, further tightening the inverse between the old and new crops.

• Farmers and analysts are anxiously watching the weather for signs of rain, which has been sparse in Western Canada this spring. Smoky air from widespread forest fires has helped mitigate the impact of heat and dryness upon the parched soils, but rain is needed soon by most farmers.

• Traders said the canola market has been strong in withstanding the weakness in Chicago Board of Trade soyoil Sv1 until today, so Monday's action just gave back some of canola's relative strength, rather than reflecting a change in the fundamentals.

• Chicago Board of Trade soyoil futures BOv1 fell 1.30% on Monday, for a fourth straight loss.

• Euronext August rapeseed futures COMG5 fell 0.26%.

• The Canadian dollar CAD= was little moved on Monday. CAD/