ICE Canada Review: Canola Posts Small Gains

With heavy rains causing more problems to some areas of western Canada over the weekend, the weather concerns that triggered the recent rally in canola continued to prop up the market on Monday, according to market participants.

Traders are still uncertain as to the extent of the damage and crop losses to the canola crop, and that uncertainty should keep the market well supported. Gains in CBOT soybeans also accounted for some spillover buying in canola throughout the session.

However, canola ran into technical resistance at the day’s highs, which weighed on values. A trader said some large sell orders came in at the close, exaggerating the eventual retreat.

A lack of fresh export business, as the sharply higher prices have made canola less attractive to some end users, also limited the upside, traders added. Declining crush margins were another bearish price influence, keeping domestic processors on the sidelines.

About 18,558 contracts traded on Monday, which compares with Friday when an estimated 17,263 contracts traded. Spreading was a feature in canola, accounting for about 11,024 of the contracts traded.

Western barley futures were untraded and unchanged on Monday. The wet weather may be cutting into barley acres, but it will also likely leave more of the crop grading as feed this year, keeping prices well contained, according to analysts.

Prices are in Canadian dollars per metric ton.

Settlement