ICE Canada Review: Short-Covering, Output Issues Lift Canola

The evening up of positions ahead of the weekend was a feature of the activity.

Some of the commercial demand influencing the upward price action in canola was related to reports of weather related issues which were believed to be downsizing China’s and the Ukraine’s rapeseed crops, brokers said. Participants were said to be splitting positions between Matif and ICE Canada canola futures.

The pull-back in the value of the Canadian dollar was an underpinning price influence for canola with the weak currency helping to stimulate fresh demand from domestic processors during the day, traders said.

The slow pace of producer offerings into the cash pipeline helped to support values.

Gains overnight in Malaysian palm oil and European rapeseed values prompted some of the early advances seen in canola.

The need to keep a weather premium in the canola market was also an underpinning price influence, brokers said.

The upside in canola was limited by the sell-off seen in CBOT soyoil values. Profit-taking and overhead technical resistance also restricted the price gains seen in canola.

The improved growing conditions in western Canada for crops and continued talk of record canola acreage, also continued to limit the upside price potential.

A drop off in exporter pricing also tempered the gains, as Japan was in the midst of a national holiday, traders said.

There were an estimated 8,652 canola contracts traded Friday, down from 16,081 during the previous session. Of the contracts traded, 2,768 consisted of spreads.

Western barley futures were untraded and unchanged Friday.

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