WCE close: Canola up on CBOT soy gains

(Resource News International) — Winnipeg Commodity Exchange grain and
oilseed futures closed Wednesday’s session mainly higher with canola boosted by the
strong rally in Chicago Board of Trade soy complex futures, brokers said.

Canola saw a light to moderate trade with intermonth spreading enhancing the level
of activity. Traders continue to watch for heavy commodity and index fund spread trade
which they expect to occur by the end of the week.

The total canola volume was estimated 7,117 contracts, down from Tuesday’s
7,799 contracts, including an estimated 3,202 contracts involved in the spread trade.
There was only light canola options activity with 50 Nov 430 puts traded.

Canola rallied in the wake of the upward surge in CBOT soy complex futures.
Contributing to the gains was talk of canola export demand and ideas that China is
booking canola oil, traders said.

They noted that with tanker freight rates lower than the bulk commodity freighter
rates and disease problems in Chinese hogs reducing feed demand, recent strong crusher
buying in the market reflected canola oil exports to China.

The advancing harvest, resulting in farmer selling, and long liquidation by
disappointed speculators, who expected to see a move in canola to fresh highs, accounted
for much of the selling pressure.

Crushers were the best buyers, with exporter buying also noted. Commission house
buying was evident in the trade. Elevator company hedging and long liquidation by
speculators accounted for the bulk of the selling, analysts noted.

Western barley was mainly marginally higher in light trade. The firm tone in CBOT
corn was a minor supportive factor, with much of the strength tied to expectations that the
Canadian Wheat Board (CWB) would be revising its barley prices higher in
Thursday’s pool return outlook (PRO) report, brokers said. Keeping the advance
modest was the absence of aggressive end user demand.

The total estimated barley volume was 440 contracts, down from Tuesday’s 765
contracts, including an estimated 182 contracts involved in the spread trade.

Feed wheat advanced in very light volume. The firm tone in U.S. wheat futures and
ideas that the CWB would raise wheat prices in Thursday’s PRO prompted the
gains.

The total feed wheat trade was estimated at eight contracts, down from 30 on Tuesday.