ICE Canada Grain/Oilseed Review: Dryness Concerns Aid Canola

Some of the price advances experienced by canola came in view of sharp gains posted Wednesday in CBOT soybeans and soyoil when Canadian markets were closed in observance of the Canada Day holiday, brokers said.

Helping to give canola futures an upward boost Thursday were the extremely dry growing conditions in the western half of Saskatchewan and much of Alberta, traders said. Many of the crops in that region were reportedly sitting in dust waiting to germinate, based on comments from provincial government officials.

The lack of farmer deliveries into the cash market helped to underpin canola futures with producers unwilling sellers of available canola due to the poor crop production prospects, traders said.

Routine exporter pricing and light domestic crusher demand also provided a firm floor for canola values during the session. Weakness in the Canadian dollar Thursday also contributed some minor price support for canola.

The upside in canola was limited by light profit-taking ahead of the US holiday weekend and the weak tone being experienced by CBOT soybean and soyoil values Thursday. The weak outside market conditions, including losses in global crude oil, were also undermining price influences on canola.

The absence of fresh export demand for canola further restricted the upward price action.

There were an estimated 7,196 canola contracts traded during Thursday’s session, down from 9,405 during the previous session. Of the contracts traded, 1,710 were spread related.

Western barley futures were mixed with activity in the October and November contracts dominated mainly by commercials. Re-positioning of contracts was a feature of the activity, brokers said.

An estimated 115 barley contracts changed hands during the session. On Wednesday, 85 barley contracts were traded. Of the contracts traded on Thursday, none were spread related.