Canola Firm On Lower Acres

Canola saw a good level of trade with intermonth spreading augmenting the activity.

The total canola volume was estimated at 16,230 contracts, down from Thursday’s 25,842 contracts, including an estimated 10,730 contracts involved in the spread trade.

Canola was modestly higher in the overnight market reflecting the firm tone in international vegetable oil markets, as Malaysian palm oil futures moved to 8 month highs. Canola held onto its gains as the North American trading session got underway and the Chicago soy complex rallied.
Canola ended the session higher at its highs of the day.

Canola drew support from the bullish Statistics Canada planting intentions report as farmers indicated that they intended to plant 14.9 mln acres of canola, down from 2008’s record 16.1 mln and below trade forecasts. However, the impact of the report was muted by grain trade skepticism. They noted that the report is a month old and that the market has rallied in that time.
In addition they stated that seed sales in the past month support ideas that canola acres will be higher than the StatsCan report.

The firm tone in the Chicago Board of Trade soy complex gave some support as did slow farmer selling. The late rally in CBOT soy encouraged the late canola move to its highs as the close of the session.

Capping the gains was the very strong Canadian dollar and the fact that new crop canola is approaching significant technical resistance in the Nov contract.

Exporters and crushers were steady buyers with commodity funds buyers early in the day. Traders estimated their buying at 500 to 1,000 July contracts. The selling was mainly commercial scale-up selling with elevator company selling described a s steady. Cash dealers indicated that farmers will only be light sellers until the cash bids climb to the $10.00/bu level.
Currently prices are averaging about $9.50/bu across western Canada.

Western barley were little changed in very light trade. The market was undermined by the lack of demand in the small volumes. Brokers indicated that the weak tone in CBOT corn and the higher acres in the StatsCan planting report were only a minor bearish influence. However the lack of farmer selling balanced the weakness off.

The total barley volumes were estimated at 51 contracts, down from 190 contracts on Thursday, including an estimated 24 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: