ICE Canada Review: Canola Climbs In Catch-Up Role

Advances seen in CBOT soybean futures on Monday and in the nearby contracts Tuesday, helped to influence some of the upward price action seen in canola, traders said. New contract highs in Malaysian palm oil and European rapeseed futures during the past few sessions also provided strong support for canola, they said.

Continued strong domestic processor demand for canola also continued to influence the upward price action seen in the commodity, brokers said. The pricing of both old and new export business for Canadian canola also underpinned values.

Some light speculative fund buying interest also surfaced during the session, helping to generate a firm price floor for canola.

However, the advances in canola were trimmed by the downward price slide exhibited by CBOT soyoil futures, brokers said. The strong Canadian dollar, which was trading above parity with the US currency Tuesday, also restricted the price advances, they said.

The upward price momentum in canola was also tempered by scale up hedge selling by grain companies, brokers said. They noted that canola producers in Alberta were getting C$13.00 a bushel for canola based on a deferred delivery basis, which was stimulating the hedging.

Profit-taking at the highs further limited the price advances in canola.

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

There were an estimated 19,445 canola contracts traded Tuesday, down from the 24,424 contracts that changed hands during the previous session. Of the contracts traded Tuesday, 15,242 were spread related.

Western barley futures were unchanged and untraded Tuesday. On Thursday, no western barley contracts changed hands.