ICE Canola Contracts Strengthen on C$ Weakness

The Canadian dollar was sharply weaker early Tuesday, hitting its lowest level in three weeks as the Bank of Canada left interest rates unchanged and cut its growth forecast, analyst said.

Adding to the strength in canola was steady pricing of old export business to Japan and the surfacing of some fresh speculative demand, brokers said.

Small gains overnight in Malaysian palm oil also helped to generate some of the upward price action.

Some support in canola was also linked to a drop off in the level of elevator company hedges hitting the market, traders said. They noted that farmers in western Canada have eased their deliveries into the cash pipeline in hopes of seeing cash bids climb higher still.

The upside in canola was tempered by the declines seen in CBOT soyoil and in soybean futures.

The favourable weather for harvest activities in western Canada and continued indications that canola yields were coming in at higher than anticipated levels, also helped to restrict the price advances, brokers said.

The rolling out of the November contract and into the January future through the use of spreads continued to be a key factor behind the volume total.

There were an estimated 7,568 canola contracts traded at 10:27 CDT. Of the contracts traded, 3,870 were spread related.

There were no western barley futures traded as of 10:27 CDT.