WCE close: Canola up on CBOT soy rally

(Resource News International) — Winnipeg Commodity Exchange grain and oilseed
futures closed Thursday’s session mainly higher with canola advancing in the wake of
the strong upward surge in Chicago Board of Trade soy complex futures, brokers said.

Canola had an exceptionally heavy trade comprised mainly of intermonth
spreading. Commodity funds began their rolling of November positions into the January contract
in a “big way” on Thursday, said traders. They estimated that between 8,000 and 10,000
spreads reflected fund activity. Commercials provided the other side of the trade.

The total canola volume was estimated at 27,781 contracts, up from Wednesday’s
18,906 contracts. Thursday’s total spread trade was estimated at 21,726 contracts.

Canola futures rallied in the wake of the big gains in the CBOT soy complex.
Contributing to the firmness was slow farmer selling and improved crush margins,
traders said.

Keeping the canola gains more modest than the U.S. soy market was the firm tone in
the Canadian dollar, the sluggish pace to fresh export demand and the large supplies of
canola in commercial hands. The inability of the market to break above the $440 per tonne
level in the November contracts earlier this week was also a bearish factor, analysts said.

Traders indicated that they expect the Canadian Grain Commission weekly
statistics on Friday to show that visible canola supplies in the latest week have increased
to over 1.4 million tonnes from the previous level of 1.3 million tonnes and under a million
tonnes earlier in the month.

Crushers were the strongest buyers on Thursday with only light routine exporter
interest noted. Local and commission house buying was also evident.

The selling was mainly commercial, with scale-up elevator company hedging
accounting for the bulk of the offerings.

Western barley futures ended modestly higher in light commercial trade. The firm
tone in CBOT corn and slow farmer selling supported the market with the lacklustre trade
accounting for a choppy tone, said brokers.

The total estimated volume was 386 contracts, down from 536 contracts on
Wednesday.

Feed wheat prices dropped in small activity as commercial liquidation selling
continued with significant demand lacking, said traders. An estimated 50 feed wheat
contracts traded, up from no activity on Wednesday.