ICE Canada Review: Canola Up On CBOT Soybean Gains

Activity was described as volatile with spreading helping to augment the canola volume. Some evening up of positions ahead of Friday’s latest round of supply/demand balance sheets from the USDA was a feature of the trade.

Some early support in canola was derived from the advances seen in Malaysian palm oil futures overnight. The buying back of previously sold positions by a variety of market participants helped to stimulate the price advances in canola, traders said.

A drop off in marketings by producers was a supportive price influence for canola as was routine pricing of old export business to Japan by commercials, brokers said.

Ongoing concerns about the dry conditions in the western areas of the Canadian prairies just ahead of seeding operations also influenced some of the upward price momentum, traders said.

The upside in canola was limited by the firm Canada dollar. While the Canadian unit had dropped below par against the US currency in Wednesday afternoon activity, it was still considered strong enough to cause domestic crushers to ease up on their purchases of Canadian canola, brokers said. The firm Canadian dollar was also causing exporters to back away from doing new business.

There were also ideas that canola acreage in western Canada will be significantly higher than anticipated this spring as producers look to a crop that will provide a possibility of a good return, traders said. Few other crops were said to be offering producers any sort of positive farm income.

There were an estimated 18,875 canola contracts traded Wednesday, up from 15,004 during the previous session. Of the contracts traded, 15,812 contracts were spread related.

Western barley futures were mostly steady in non-existent activity.

No barley contracts changed hands during the session. On Tuesday, no barley contracts were traded.