ICE Canada Review: Canola Follows CBOT Soybeans Up

By Dwayne Klassen, Commodity News Service Canada Inc.

Winnipeg – Jan 9/12 – Canola contracts on the ICE Futures Canada trading platform finished Monday’s session with significant advances. Strength in canola was derived from the sharp gains posted by the CBOT soybean complex as well as from steady demand from commercial accounts, market watchers said.

Spreading contributed to the volume total with the evening up of positions ahead of the USDA supply/demand report scheduled to be released later this week also a feature of the activity.

Canola contracts moved higher reacting to the sharp gains seen in CBOT soybean and soyoil futures, traders said. Gains overnight in European rapeseed futures helped to fuel some of the price advances.

Additional support in canola came from the pricing of old export business and from a pick up in domestic crusher demand by the commercial sector.

The penetration of technical resistance levels in a number of canola contracts during the day further added to the upward price momentum, brokers said. The triggering of buy-stop orders on the way up also amplified the upward price action.

The establishment of new long positions by speculative fund accounts also helped to generate the price gains seen in canola, traders said.

The gains in canola were restricted in part by profit-taking as well as by scale up hedge selling by grain companies.

There were an estimated 22,496 canola contracts traded Monday, up from the 14,579 contracts that changed hands during the previous session. Of the contracts that traded, 10,916 were spread related.

There were no western barley contracts traded during the session.

Prices are in Canadian dollars per metric ton.