ICE Canada Review: Weather Worries Aid Canola

Steady commercial, commission house and local buying provided the support seen in canola.

Some of the upward momentum in canola came from the buying back of previously sold positions as well as to the wet conditions across western Canada. The wet conditions were said to be preventing producers from finishing up their canola seeding operations and causing damage to canola fields already planted, traders said. Weather outlooks calling for additional precipitation of varying amounts further underpinned canola.

Brokers were indicating that between 2.0 million and 3.0 million acres of canola may go unplanted this spring due to the current wet conditions. Most of that area was said to be located in Saskatchewan.

The reluctance of producers to deliver canola into the cash pipeline given the uncertainty regarding production also helped to fuel the upward price momentum, traders said. They noted there were again reports of premiums being offered by grain companies to entice producers to deliver.

Steady domestic crusher demand and the pricing of old export business to Japan helped to underpin canola futures.

The upside in canola was limited by the firm Canadian dollar and by the losses seen in CBOT soybean and CBOT soyoil values. The excellent weather conditions for the development of the US soybean crop was also an undermining price influence.

The lack of fresh export demand also restricted the price advances in canola.

Spreading was a feature of the activity in canola and helped to augment the volume total.

There were an estimated 20,996 canola contracts traded Monday, up from 18,263 during the previous session.

Western barley futures were untraded and unchanged Monday. No barley contracts changed hands during the session. On Friday, no barley contracts were traded.