ICE Canada Review: Canola Rallies On CBOT Strength

A good portion of the volume total experienced by canola was tied to the rolling of positions out of the January future and into the March contract by the major index fund accounts through the use of spreads, brokers said.

Position evening ahead of the crop production report from Statistics Canada on Friday was also a feature of the activity.

Canola contracts found strong support from the sharp gains seen in the CBOT soybean complex and on increased worries over the dry growing conditions in the soybean growing regions of Brazil and Argentina, traders said.

Some of the buying seen in canola also reflected positive chart signals as well as steady domestic processor demand.

The pricing of old export business continued to benefit canola contracts as did rumours that some Canadian canola oil export business has been concluded, brokers said.

The upside price momentum in canola was slowed somewhat by the upswing in the value of the Canadian dollar and by scale-up selling by line companies. Profit-taking at the highs of the day was also evident and further tempered the price advances in canola.

There were an estimated 19,281 canola contracts traded Wednesday, down from the 21,826 contracts that changed hands during the previous session. Of the contracts traded Wednesday, 12,708 were spread related.

Western barley futures were steady to higher with commercials trying to unload their December contracts associated with the price gains, brokers said.

Western barley futures saw 30 contracts change hands on Wednesday. On Tuesday, 20 western barley contracts were traded.