ICE Canada Review: Canola Hits New Contract Highs

While light amounts of profit-taking tempered the upside in canola for most of the day, speculative buying picked up heading into the close and eventually helped the market break above those resistance levels, according to traders. A lack of willing sellers contributed to the jump higher, with most producers content to sit on the sidelines until the New Year before making more sales, said market participants.

Overnight gains in Malaysian palm oil and European rapeseed futures, followed by gains in Chicago soybeans and soyoil, also provided some underlying support for canola.

Strong crush margins added to the gains in canola, as the domestic processors continue to work at a record pace.

The Canadian dollar was slightly firmer on Wednesday, further limiting the advances in the market.

About 29,206 contracts were traded on Wednesday, which compares with Tuesday when an estimated 27,809 contracts changed hands. Spreading was a feature, accounting for 19,000 of the contracts traded. Activity is expected to turn thin and choppy over the next week, and the lighter volumes during the Christmas/ New Year’s period were resulting in some volatility in the market.

Western barley futures were untraded and unchanged.

Settlement prices are in Canadian dollars per metric ton.