ICE Canada Review: Canola Rallies As CBOT Soybeans Climb

Activity in canola was on the lighter side with many market participants taking to the sidelines ahead of the New Year holiday break. The ICE Futures Canada trading platform will be closed on Monday, January 3, 2011 for a delayed New Year’s day holiday.

The upward momentum in the US oilseed sector was fueled in part by the ongoing dry growing conditions in the soybean producing regions of Argentina. Those concerns also helped to underpin canola values, brokers said.

Adding to the strength seen in canola were the lack of hedge offers from grain elevator companies in western Canada. Producers were said to have locked up their bins for the remainder of the holiday season, traders said.

The pricing of old export business and some small domestic crusher demand also influenced some of the upward price action seen in canola, brokers said.

The triggering of some buy-stop orders as canola values rallied, helped to amplify the price advances, brokers said. The thinness of the volume also augmented the price gains.

The advances in canola were kept in check by the upswing in the value of the Canadian dollar. The lack of fresh export demand for Canadian canola was an undermining price influence as well.

Year-end profit-taking by a variety of market participants also restricted the price gains seen in canola.

There were an estimated 4,054 canola contracts traded Friday, down from the 7,733 contracts that changed hands during the previous session. Of the contracts traded, 1,668 were spread related.

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