ICE Canada Review: Canola Turns Higher Following Soy

While favourable harvest weather across western Canada had sent canola prices down at one point during the session, values eventually managed to bounce back higher following soybeans.

Ideas that the recent declines in canola were overdone contributed to the eventual strength in the market, with some speculative buying noted, according to traders. In addition to the technical recovery, the losses also encouraged some domestic crusher and exporter pricing, adding to the firmer tone.

However, the warm, dry conditions across western Canada continue to allow farmers to make good progress bringing in this year’s crop. The advancing harvest accounted for most of the selling pressure in canola, with farmer hedges a feature. Producers were delivering off the combine, and the ample nearby supplies of canola also tempered the upside.

Statistics Canada will release its updated production estimates on Monday, October 4, and some positioning ahead of that report was taking place. Traders were unsure how large the canola crop would be in the latest data, as the survey was conducted before harvest operations got underway in earnest, due to the lateness of this year’s crop development.

About 24,828 contracts traded on Thursday, which compares with Wednesday when an estimated 20,563 contracts changed hands. Spreading was a feature on Tuesday, accounting 16,488 of the contracts traded.

Western barley futures were untraded on Thursday, although the December contract was revised lower by ICE Futures Canada at the close.

Settlement prices are in Canadian dollars per metric ton.