ICE Canada Review: Canola Follows Soybeans Higher

Commodity and index funds were the noted buyers in canola, adding to their already large long positions, according to traders. Some technical buy stops were likely hit on the way up as prices hit new contract highs in many months.

Canola was lacking any fresh fundamental news of its own, and most of the strength was seen as stemming from the rally in the Chicago soy complex. The gains in soybeans were tied to the weaker US dollar. While the Canadian dollar was slightly firmer on the day, it was underperforming other international currencies, which also added to the strength in canola, according to a broker.

In addition to the fund buying, light amounts of domestic crusher and exporter pricing were also noted in the canola market.

However, canola was lagging soybeans to the upside, amid ideas that canola had become too expensive compared to some of the other oilseeds, said traders.

Light commercial and farmer selling, along with some speculative profit-taking also tempered the upside in canola. However, farmers were said to be slowing down their sales, in anticipation of even higher prices going forward.

About 20,723 contracts traded on Thursday, which compares with Wednesday when an estimated 9,418 contracts changed hands. Spreading was a feature, accounting for 12,196 of the contracts traded.

Western barley futures were untraded and unchanged on Thursday.

Settlement prices are in Canadian dollars per metric ton.