ICE Canada Review: CBOT Losses Ease Canola Gains

Canola futures had posted some good gains during the day on talk of fresh Canadian canola sales to China, with commercials pricing the business earlier in the session, traders said. The penetration of technical resistance levels also sparked a fresh wave of speculative fund buying, which took canola to its highs of the day.

Support in canola was also derived from aggressive demand from the domestic processing sector.

The new 29 year highs established in Malaysian palm oil futures had also encouraged some buying of canola futures earlier in the day, brokers said. Weakness in the Canadian dollar and sentiment that the supply/demand report from the USDA on Friday would show tighter US soybean supplies also offered canola some good support.

However, at the highs of the day, profit-taking from a variety of outlets surfaced, taking canola off its highs. Scale up elevator company hedge selling was also an undermining price influence, brokers said.

Some of the late weakness in canola also came as the pricing of the fresh export business was completed. The advances in canola were also eased as the downward price slide in CBOT soybean futures began to amplify, traders said. A downturn in CBOT soyoil also prompted some selling of canola.

Strong volume totals were again seen in canola Thursday, with spreading accounting for a big portion of that activity.

There were an estimated 24,376 canola contracts traded Thursday, down from the 25,167 contracts that changed hands during the previous session. Of the contracts traded Thursday, 14,174 were spread related.

Western barley futures were unchanged and untraded Thursday. On Wednesday, no western barley contracts changed hands.