ICE Canola Up On US Soy Gains

Canola saw a moderate trade with intermonth spreading enhancing the volumes. Positioning was noted ahead of Thursday’s Statistics Canada crop production report, which created some choppiness.

The total canola volume was estimated at 17,174 contracts, up from Friday’s 8,863 contracts, including an estimated 11,184 contracts involved in the spread trade.

Canola was narrowly mixed in the overnight trade amid a lack of fresh developments. Canola turned higher as the North American trading session got underway and the CBOT soy complex rallied. However throughout the session, canola bounced from gains to losses several times, ending higher.

Canola drew much of its direction, particularly late in the session, from the gyrations in CBOT soy complex futures, analysts said. Canola was also underpinned by slow farmer selling and friendly technical signals.
The Jan contract challenged resistance at the C$410-$411 once again.
The market pushed above the resistance, but was unable to hold those level and retreated at the close as the CBOT soy complex backed down from its highs.

Weighing on the market was the locomotive engineer strike against CN Rail. However it was partially offset by news from the government that it was ready to legislate an end to the strike.
Some selling was tied to the continued lack of canola export sales to China, traders said. This was partially offset by this week’s trip to Beijing by Canada’s Prime Minister Stephen Harper, as traders are hoping he can resolve the issue with the Chinese.

The firm Canadian dollar also prompted some selling as did ideas that Thursday’s StatsCan crop production report will show a larger canola crop than the 10.3 mln metric tons it estimated in its last production report.

Exporter and crusher buying was augmented by speculative buying while the selling was principally commercial.

Western barley ended higher in light commercial trade. The market was supported by the gains in CBOT corn and the lack of farmer selling, brokers said.

The total barley volume was estimated 15 contracts, up from 14 contracts on Friday.

Prices are in Canadian dollars per metric ton: