ICE Canola Futures Gain In Catch Up To CBOT Play

Gains overnight in e-CBOT soybeans helped to provide some support as did the higher close in Malaysian palm oil futures.

Some of the gains in canola also came in anticipation of further advances in CBOT soybean and soyoil futures with the start of the North American day session, brokers said.

Talk of renewed Chinese buying interest in Canadian canola also provided some of the upward price action.

A combination of rain and snow during the holiday weekend in western Canada delayed the harvest of the remaining canola and contributed to the support base in the commodity, traders said.

Slow producers offerings were seen as supportive with the pricing of old export business adding to the strength in canola, traders said.

The upside in canola was expected to run into some technical resistance levels with the strong Canadian dollar early Tuesday also limiting the upside in the commodity, brokers said.

The Canadian dollar was trading near 96.81 US cents in early Tuesday morning activity and was expected to continue pushing towards the 97 US cent level.

Some bearish sentiment in canola was also seen coming from Friday’s USDA supply/demand report. The USDA pegged the US canola crop at 681,670 tonnes, up 4% from last year despite a reduction in acreage. The yield forecast, at 37.22 bu/acre is 8 bu above last year’s yield average. The yield in North Dakota, the largest US canola-producing state, is forecast at a record high 38 bu/acre.

Market participants in Canada are also expecting much higher than anticipated yield potential in western Canada’s canola crop, brokers said.

As of 9:47 am EDT, there were 5,779 canola contracts traded.

As of 9:47 am EDT, no western barley contracts had been traded.