By Dwayne Klassen, Commodity News Service Canada Inc.

Winnipeg – July 9/12 – Canola futures on the ICE Canada trading platform finished Monday’s session on a firmer footing with new contract highs established during the day. Support in canola was derived from the continued hot and dry weather conditions that are threatening to reduce the yield potential of the US soybean crop, market watchers said.

The resulting sharp gains in CBOT soybean and soyoil futures spilled over to bolster canola values, brokers said.

Early gains in canola were stimulated by the sharp advances posted by Malaysian palm oil and European rapeseed futures overnight.

Chart based speculative and commodity fund buying contributed to the price strength displayed by canola. The triggering of buy-stop orders on the way up amplified the price gains.

Good commercial demand, believed to be covering old export business to Japan as well as some domestic crusher needs, also underpinned canola futures, traders said. Weakness in the Canadian dollar Monday also provided a firm floor for canola futures.

The upside in canola was restricted by late day profit-taking and by sentiment among the oilseed industry that growing conditions for canola in western Canada remain mainly favourable.

There were concerns, however, that some areas of the Canadian prairies are extremely dry and the extremely hot temperatures forecast for some areas will come during the flowering stage of canola’s development and in turn reduce the yield potential of the crop, traders said.

There were an estimated 13,407 canola contracts traded Monday, down from the 14,279 contracts that changed hands during the previous session. Of the contracts traded, 5,624 were spread related.

There were no durum or milling wheat contracts traded during the session but values were increased by ICE Canada at the close. However, there was some commercial two-way trade evident in barley futures, resulting in 142 contracts exchanging hands during the session at stronger values.

Prices are in Canadian dollars per metric ton.