By Dwayne Klassen, Commodity News Service Canada

Winnipeg – August 29/12 – Canola futures on the ICE Canada trading platform ended Wednesday’s session with significant advances with some of the upward price momentum linked to the sharp advances experienced by CBOT soybean and soyoil values, market watchers said.

The triggering of commodity fund and speculative buy-stops on the way up, amplified the price gains seen in canola, traders said.

Early support in canola came from the initial upward price action seen in CBOT soybean complex values. However, when those gains were extended, the advances in canola were also extended. Overnight gains in European rapeseed futures also influenced some of the early price strength.

Adding to the support in canola were reports of lower than anticipated yield potential as the harvest continues across western Canada, brokers said. Steady domestic crusher demand helped to fuel the rally in canola as did the pricing of old export business by commercials.

A small downturn in the value of the Canadian dollar in Wednesday afternoon activity also was an underpinning price influence for the commodity.

Some of the buying in canola was also attributed to ideas that the commodity was undervalued in comparison to CBOT soybean futures, traders said.

The upside in canola was restricted by the taking of profits at the highs of the day. Favourable weather for the advancement of the harvest in western Canada also capped the upside price potential.

Elevator company hedge selling, in anticipation of increased farmer deliveries of canola over the next couple of weeks, also tempered the price advances, brokers said.

There were an estimated 19,350 canola contracts traded Wednesday, up from the 11,851 contracts that changed hands during the previous session.

There were 8 milling wheat contracts traded with commercials seen as the main participants. Durum and barley contracts were untraded and unchanged.

Prices are in Canadian dollars per metric ton.