By Dwayne Klassen, Commodity News Service Canada

Winnipeg – October 16/12 – CNS – Canola contracts on the ICE Futures Canada platform were trading at higher levels in fairly active early morning trade. Canola futures were posting strong gains with support stemming from sentiment that losses over the past couple of days were overdone and that values needed to correct to the upside, market watchers said.

The establishment of new long positions by commercials and speculative accounts helped to enhance the upward price action seen in canola, traders said.

Some support in canola was also stemming from the upturn in CBOT soybean and soyoil futures Tuesday morning. Small gains were also experienced overnight in European rapeseed futures, while Malaysian palm oil suffered some minor declines.

The slow pace of farmer deliveries into the cash pipeline in western Canada contributed to the strength in canola as did the pull-back in the value of the Canadian dollar early Tuesday, brokers said.

The upside in canola was capped by the favourable weather for the planting of soybeans in South America. Talk of better than anticipated yield potential as the US soybean harvest continues, also restricted the upside in canola.

As of 8:39 CDT, about 5,966 canola contracts had traded.

Milling wheat, durum and barley contracts were unchanged and untraded.

Prices in Canadian dollars per metric ton at 8:39 CDT: