ICE Canada Review: Export, Fund Demand Boosts Canola

Fresh export sales overnight of at least two cargoes of Canadian canola to China accounted for some of the buying interest in canola, according to a broker. Domestic crusher buying and routine Japanese pricing also provided support.

With Canada’s canola production down on the year, end users were said to be making purchases now in the likelihood that values will need to move higher later on in order to ration demand.

While there is currently no weather related threat to the canola crop, the harvest has been delayed in many areas of western Canada and traders were starting to express some concern about the possibility of an early frost.

Speculative fund buying added to the firmer tone in canola, as the technical signals turned bullish in the market and the buying built on itself, said a broker. Gains in the CBOT soy complex were also supportive.

Farmer and commercial hedges, encouraged by the move higher, limited the advances in canola. However, that selling was largely on a scale-up basis.

A firmer tone in the Canadian dollar also served to keep the gains in check, according to traders.

About 16,739 contracts traded on Friday, which compares with Thursday when an estimated 16,783 contracts traded. Spreading was only a minor feature on Friday.

Western barley futures were untraded and unchanged on Friday.

Settlement prices are in Canadian dollars per metric ton.