ICE Canada Review: Canola Up In Sympathy With US Markets

Activity was on the quiet side in canola on Thursday, and with little fresh fundamental news of its own to provide direction, the gains in Chicago soybeans were enough to take canola higher as well. "We’re basically following the US," said a local canola trader.

Malaysian palm oil and European rapeseed futures were also stronger in overnight trade, lending some further spillover support to canola, according to traders.

Commercials were the noted buyers, with some commission house pricing also a supportive factor in the canola market, said market participants.

Farmer selling has moved to the sidelines for the time being, as cash bids in the country have deteriorated, helping further underpin the market. The local trader said cash prices were now below C$10 per bushel in most cases.

Crop conditions across western Canada are still highly variable, but are said to be improving overall. The better crop prospects served to keep a lid on canola prices, according to traders.

Commercial hedges, and some spec profit-taking were also coming forward on any attempts to move prices too far to the upside. The C$456 per metric ton level was a key price point in the November contract during the day’s trade, with the canola market showing little staying power above that level.

About 7,906 contracts traded on Thursday, which compares with Wednesday when an estimated 7,647 contracts traded. Spreading accounted for about 2,952 of the contracts traded.

Western barley futures were untraded on Thursday, but values were revised higher by ICE Futures Canada at the close.

Settlement prices are in Canadian dollars per metric ton.