ICE Canada Review: CBOT Advances Lift Canola

The move by the Canadian currency to trade at par with the US dollar hadn’t occurred since July of 2008.

Fairly good volumes of trade were seen in canola with much of that activity believed to be the realigning of spreads, brokers said.

Canola contracts were underpinned throughout the day by the advances posted by CBOT soybean and soyoil values, traders said. The buying back of previously sold positions by a variety of market participants helped to generate some of the support as did routine pricing of old export business to Japan by commercials.

Dryness concerns in parts of Alberta and Saskatchewan heading into spring seeding also provided a firm floor for values. A decline in the level of farmer deliveries to the country elevator system in western Canada contributed to the strength in canola, brokers said.

The gains in canola, however, were hard earned in view of the record oilseed supply that is available currently on the world market. A small drop in domestic crusher demand because of the strong Canadian dollar and the lack of fresh export business also limited the price advances, traders said.

Talk of large canola plantings in western Canada this spring also restricted the upward price momentum.

There were an estimated 15,004 canola contracts traded Tuesday, up from 13,285 during the previous session. Of the contracts traded, 9,712 contracts were spread related.

Western barley futures were unchanged and untraded in non-existent activity.

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