ICE Canada Review: Demand, CBOT Soyoil, Lift Canola

Spreading was a feature of the activity in canola and contributed to the volume total.

Canola futures held strong gains throughout the day with much of the early advances spurred on by the advances seen in Malaysian palm oil and European rapeseed futures overnight, brokers said.

The strong advances in CBOT soyoil and the modest gains in CBOT soybeans also provided a firm floor for canola to work with.

Strong domestic crusher demand helped to fuel the upward price action in canola as did steady pricing of old export business to Japan by commercial accounts, brokers said.

News that China purchased quantities of US soybeans on the weekend also prompted ideas that some Canadian canola export business may have also been concluded. However, exporters cautioned about reading too much into that sentiment, given that the Chinese Government will only allow the import of Canadian canola into certain regions of its country given Canada’s blackleg canola disease issues.

Some light speculative demand was evident and helped to generate some support in canola during the day. The lack of willing sellers in the canola market also helped to exaggerate the price advances, brokers said.

The selling that did surfaced came on a scale up basis, and was done mainly by grain companies, trying to cover hedge positions. Profit-taking, overbought price sentiment and firmness in the Canadian dollar were also undermining influences in canola, brokers said.

There were an estimated 25,363 canola contracts traded Monday, up from the 13,776 contracts that changed hands during the previous session.

Western barley futures were unchanged and untraded Monday. On Friday no western barley contracts were traded.

Prices are in Canadian dollars per metric ton.