ICE Canada Review: Canola Up On Steady Demand, Slow Selling

Farmers were generally said to be holding out for higher prices, and that lack of selling pressure accounted for some of the relative strength in canola, according to traders. Solid gains in the European rapeseed market, along with overnight advances in Malaysian palm oil also helped keep canola well supported. Some speculative buying was noted as well, with Friday’s move higher seen as bullish from a chart perspective, said market participants.

A slightly weaker tone in the Canadian dollar was also supportive for canola, helping crush margins improve. However, aside from routine pricing, there was no fresh exporter or domestic crusher buying coming forward.

Losses in CBOT soybeans tempered the upside in canola, with some scale-up commercial hedges coming forward. The market was also still digesting Friday’s Statistics Canada production report, which said the country’s canola crop was larger than most analysts had anticipated. At 11.8 million metric tons, production was well above the 10.4 million tons StatsCan predicted in their previous report. However, the crop was still smaller than the year ago level, and traders continue to anticipate relatively tight ending stocks given the solid demand projections.

About 17,264 contracts traded on Monday, which compares with Friday when an estimated 24,409 contracts changed hands. Spreading was a feature, accounting for 11,300 of the contracts traded.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.