ICE Canada Review: Canola Rises As Demand Improves

Spreading was a big part of the volume total seen in canola Wednesday. Some evening up of positions ahead of next week’s supply/demand balance sheet update from the USDA was also a feature of the activity.

Canola contracts found some good support from renewed demand from domestic processors, especially as crush margins have again taken a turn for the better, brokers said. Talk of fresh export business for Canadian canola helped to augment the price advances as did the pricing of old export sales.

The sharp advances in CBOT soybean and soyoil futures bolstered the gains seen in canola as did some light chart based speculative and local buying.

The absence of significant farmer deliveries of canola into the cash pipeline also helped to generate the upward price action seen in canola, brokers said. They noted that producers were still very much in a holiday mood and combined with the cold temperatures which have moved into most of the Canadian prairies, few wanted to load canola from farm bins onto trucks.

The upside in canola was limited in part by the upswing in the value of the Canadian dollar and by profit-taking by speculative accounts at the highs of the day.

There were an estimated 15,099 canola contracts traded Wednesday, up from the 10,256 contracts that changed hands during the previous session. Of the contracts traded, 9,166 were spread related.

Western barley futures were unchanged and untraded Wednesday. On Tuesday, no western barley contracts changed hands.