ICE Canada Review: Canola Turns Higher As Selling Fades

Long liquidation sent the canola market lower early in the session. However, that speculative selling eventually ran its course, and a move higher in Chicago soyoil helped encourage some buying interest in canola as well, according to a trader.

Commercials were the primary buyers, although some speculators were also switching back to the buy side as values moved higher, according to a broker. Buy stops were likely hit on the way up, although technical resistance was holding in canola as the November contract neared the key C$460 per metric ton level, according to traders.

Farmers remained largely absent from the futures market, despite an increase in country movement, and that lack of hedges was also a supportive factor in canola, according to a broker.

The ongoing weather concerns in western Canada continued to underpin the canola market as well. However, an analyst said most of that uncertainty had been priced into the futures for the time being.

The Canadian dollar also recovered from early weakness, to be up by over half a cent relative to its US counterpart. The stronger currency put some pressure on canola, limiting the upside, according to traders.

About 11,464 contracts traded on Tuesday, which compares with
Monday when an estimated 10,548 contracts traded. Spreading accounted for about 4,404 of the contracts traded.

Western barley futures were untraded and unchanged on Tuesday.

Settlement prices are in Canadian dollars per metric ton.