ICE Canola Boosted By US Soy Rally

Canola saw a moderate trade with intermonth spreading once again accounting for much of the activity. Commodity funds were buyers of the spread with crushers sellers, traders said. They also noted that elevator companies could be found on both sides of the spread activity.

The total canola volume was estimated at 10,448 contracts, down from Wednesday’s 11,191 contracts, including an estimated 6,502 contracts involved in the spread trade.

Canola was higher in the overnight session, prompted by gains in international vegetable oil prices. Canola expanded its gains as the North American trading session opened and the Chicago soy complex posted a double digit advance, traders said. Canola ended higher.

Canola drew the bulk of its support from the gains in the CBOT soy complex. Also supporting the market was a slower pace to farmer selling. Cash dealers indicated that the only country movement taking place was against basis and delivery contracts. Cash bids for canola have dropped to the lowest level of the year, causing farmers to halt any fresh selling, cash traders said.

Talk of Chinese interest this week also underpinned values. Exporters noted that China had been seeking canola at the beginning of the week although no deals were made.
They expect China to be back in the canola market next week following this week’s Chinese holidays.

Canola’s gains were much smaller than the US soy complex as the very strong Canadian dollar weighed on the market. The Canadian dollar hit its highest level against the US currency in a year today.
Also pressuring the market down were the large canola crop and bearish technical signals, analysts said.

Routine exporter and light crusher buying met commercial and speculative selling. Commodity funds were light sellers of the Jan contract, said brokers.

Western barley ended narrowly mixed
in light volumes.
Commercials dominated the small activity as the gains in CBOT corn and slow farmer selling gave support despite the lack of aggressive end user demand. However at the close, elevator company selling pressured the market to small losses in most contracts and trimmed the Nov contract
back to small gains.

The total barley volume was estimated at 140 contracts, up from 41 contracts on Wednesday, including an estimated 24 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: