ICE Canada Review: Canola Ends Up, But Off Highs

Downward revisions to US soybean supply projections from the USDA led to a rally in the soy complex which spilled over to canola as well, according to traders.

Gains in soyoil were helping crush margins improve, and domestic crushers were some of the noted buyers in canola, said market participants. Some exporter pricing was also noted, although traders couldn’t confirm any fresh business. Speculators were coming forward on the buy side as well, with
the move above psychological resistance of C$600 per metric ton in the March contract triggering some additional buy-stops. However, the demand slowed down and canola moved back below that key chart point later in the day as some profit-taking and farmer hedges came forward.

While winter weather conditions were slowing farmer deliveries in Saskatchewan and Alberta, producers were still taking advantage of the climbing futures to do some forward pricing, according to an analyst.

A firmer Canadian dollar tempered the advances in canola as well. In addition, improving crop conditions for soybeans in Argentina, as the forecasts were looking a little wetter for the dry country, also served to put some pressure on values.

About 26,821 contracts were traded on Wednesday, which compares with Tuesday when an estimated 16,579 contracts changed hands. Spreading was a feature, accounting for 12,524 of the contracts traded.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.