WCE Grain/oilseed review: canola soars on soyoil gains

(Resource News International ) – Winnipeg Commodity Exchange (WCE) grain and
oilseed futures closed Thursday’s session higher with canola rallying on strength in
soyoil prices while barley climbed to record high levels on tight cash market supplies,
brokers said.

Canola saw a heavy trade with intermonth spreading accounting for much of the
activity. Commodity and index fund rolling of Nov contracts into the Jan contract began
aggressively today. That spreading is expected to be heavier tomorrow.

The total estimated canola volume was 12,935 contracts, up from Wednesday’s
7,117 contracts, including an estimated 7,658 contracts involved in the spread trade.

Canola futures rallied in the wake of strength in the Chicago Board of Trade soy
complex. Soyoil gains, in particular, boosted canola prices as crush margins showed
improvement.

The scale up nature of farmer selling and continued talk of China booking canola
oil contributed to the rally. Bullish technical signals were also supportive.

Capping the gains was the continued firm tone in the Canadian dollar and the
advancing harvest.

Crushers were the best buyers with light exporter pricing noted and small
speculative buying as well, traders said. The selling came mainly from elevator
companies with light profit taking also noted.

Western barley futures surged to fresh record highs touching limit up during the
session. Trade as heavy as tight cash market supplies boosted prices despite increased
farmer selling, brokers said. The firm tone in CBOT corn was considered a minor support
for values.

Bullish technical signals and strong end user demand as cash market supplies
tighten accounted for the bulk of the upward move. Expectations that the Canadian
Wheat Board will revise their Pool Return Outlook barley prices higher in this
afternoon’s report also fueled some of the bullish enthusiasm.

The total estimated barley volume was 1,689 contracts, up from 440 contracts on
Wednesday. Intermonth spread trade involved an estimated 510 contracts.

Feed wheat posted strong gains in small volumes as there was little strong interest
in the market. The firm tone in US wheat markets stimulated the firmness in what traders
described as a lackluster trade.

The total feed wheat volume was estimated at 25 contracts, up from just 8 contracts
traded on Wednesday.