ICE Canola Contracts Firm As Demand Remains Constant

Some of the early advances seen in canola reflected carryover buying from Tuesday’s strong close, brokers said. Gains in Malaysian palm oil overnight and strength in e-CBOT soybean values helped to generate some early support. The upward price action experienced by CBOT soybean and soyoil values Wednesday contributed to canola’s strength.

Strong demand from the domestic processing sector helped to fuel the advances in canola as did steady levels of exporter pricing of routine canola business to Japan by commercial accounts, traders said. Rumours of fresh export business for Canadian canola also continued to make the rounds, and added to the support in the commodity, they said.

Some light chart related buying interest was also evident which further underpinned canola futures. A drop off in the level of hedge selling by elevator companies provided some support to canola as well. Traders noted that producers remain good sellers, but on a scale up basis.

The small upturn in the value of the Canadian dollar did little to turn away demand, given that the currency was still weaker than it was at the end of last week, brokers said.

The rolling out of the November contract and into the January future through the use of spreads continued to be a factor in Wednesday’s volume total.

There were an estimated 10,864 canola contracts traded at 10:36 CDT.

There were no western barley futures traded as of 10:36 CDT.