ICE Canada Grain/Oilseed Rev: Soybean Rally Lifts Canola

Gains overnight in the e-CBOT soybean complex, Malaysian palm oil and European rapeseed futures had provided canola with some early strength.

Helping to push canola futures upwards was the lack of harvest progress in western Canada during the weekend due to wet and cool conditions, brokers said. There had been hopes of good harvest progress being made with the return of warm and drier conditions, but only a portion of the Canadian prairies managed to experience the improved weather.

The slow pace of farmer deliveries into the cash pipeline and the need of grain elevators to attract canola into the system in order to meet a heavy export program over the next couple of months, also helped to fuel the rally, traders said.

The buying back of previously sold positions was also an underpinning price influence for canola.

The upside in canola was limited by a drop off in domestic crusher demand. The strong Canadian dollar, which was limiting the ability of companies to put new export business on the books for the first quarter of 2010 also slowed the upward price action, traders said.

Spreading of the November/January contracts was a feature of the activity in canola and helped to augment the volume total.

There were an estimated 13,033 canola contracts traded during Monday’s session, down slightly from 13,069 during the previous session.

Western barley futures were steady to slightly higher with the gains coming late in the day. Light commercial demand in the absence of willing sellers allowed barley contracts to move up, brokers said. Strength in CBOT corn futures also provided some spillover support.

An estimated 153 barley contracts changed hands during the session. On Friday, 473 barley contracts were traded.