ICE Canada Review: Canola Climbs Higher On Spec, End- User Demand

Expectations for tightening supplies kept exporter and domestic processor pricing in the canola market, according to traders. However, they couldn’t confirm any fresh export business.

Bullish technical signals were also supportive, with fund participants adding to their long positions as the March contract neared the psychological C$600 per metric ton level, said traders.

While a softer tone in CBOT soybeans did temper the upside in canola, the Canadian market was already weaker on Monday while the US markets were closed for Martin Luther King Jr. day. CBOT soyoil futures held onto small gains on Tuesday, which was supportive for canola.

A weaker tone in the Canadian dollar, which was down by about half a cent relative to its US counterpart, added to the gains in canola, said traders.

While some scale-up farmer selling tempered the advances, most growers are on the sidelines, as they expect to see higher prices down the road. Cold weather was also limiting some farmer deliveries in western Canada, said a broker.

Much needed rains in Argentina put some downward pressure on canola, as the improving prospects for the soybean crops there weighed on the oilseed markets, said market participants.

About 14,862 contracts were traded on Tuesday, which compares with Monday when an estimated 2,350 contracts changed hands. Spreading accounted for about 5,778 of the contracts traded.

Western barley futures were steady to higher, although no contracts actually traded. The advances were a result of revisions made by ICE Futures Canada at the close.

Settlement prices are in Canadian dollars per metric ton.