ICE Canada Review: Canola Turns Higher At Close

With harvest operations moving forward across many areas of western Canada some farmer hedge pressure did weigh on values earlier in the day. However, that selling backed away as producers hold out for better prices, according to a broker.

Buyers were also reluctant to take values higher for most of the day, with some participants likely taking a breather after liquidating large long positions last week, according to a broker.

However, exporters and domestic crushers were still showing some interest, and ideas that canola may be looking oversold helped keep some support in the market as demand picked up at the close, according to traders.

A weaker tone in the Canadian dollar, as it retreated from early strength, also served to underpin canola values.

Market participants were still digesting the Statistics Canada production estimates released Friday, accounting for some of the choppiness during the session. In the first official survey of the crop year, the government agency pegged Canada’s 2010/11 (Aug/Jul) canola crop at 10.867 million metric tons, which was down from the year ago level but still at the high end of trade estimates.

Gains in Chicago soybeans provided some spillover support to canola, although soyoil was weaker.

About 8,693 contracts traded on Monday, which compares with Friday when an estimated 26,001 contracts traded. Spreading was only a minor feature during the day.

Western barley futures were untraded and unchanged on Monday.

Settlement prices are in Canadian dollars per metric ton.