ICE Canada Review: Weather worries boost canola

Heavy volumes of trade were seen in canola with the rolling out of July positions and into the November contract behind some of that activity, brokers said.

The wet weather concerns revolved around how much canola will be unseeded this spring and what kind of damage has occurred to the yield potential of the crop. Weather outlooks were calling for additional amounts of precipitation across the Canadian prairies, which was expected to further damage crops and delay seeding operations, traders said.

Market participants were estimating that between 1.0 million to 5.0 million acres of intended canola area may not be planted due to the excessively wet conditions and because of the approach of seeding deadlines for crop insurance, brokers said.

The buying back of previously sold positions was a feature of the activity and helped to push canola values higher. Support also came from the reluctance of producers to deliver canola into the cash pipeline given the crop uncertainty.

Steady domestic crusher demand and the pricing of old export business also fueled some of the advances in canola. Some additional support in canola came from reports of fresh export business being conducted, traders said.

Gains in CBOT soybean and soyoil values also encouraged some of the upward price action seen in canola.

The upside in canola was limited by the upswing in the value of the Canadian dollar and by bouts of profit-taking, traders said.

There were an estimated 49,015 canola contracts traded Wednesday, up from 37,080 during the previous session.

Western barley futures were untraded and unchanged Wednesday.

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