ICE Canola Climbs As Frost Threat Looms

"A lot of the buying has to do with the weather," a broker said, indicating that few regions in west-central Saskatchewan and central areas of Alberta have received any kind of moisture to help germinate recently planted fields.

Meanwhile, the crops that have started to emerge in the eastern regions of Saskatchewan and in Manitoba were said to be vulnerable to frost damage. Environment Canada is forecasting temperatures overnight in Saskatchewan and parts of Manitoba to drop to around freezing with some areas expecting below freezing readings.

Early strength in canola was linked to the advances seen in e-CBOT soybeans, Malaysian opalm oil and Matif rapeseed futures overnight.

Gains in CBOT soybean and soyoil values with the start of the North American day session helped to fuel the upside in canola, brokers said.

The absence of significant farmer deliveries contributed to the strength in canola futures with gains also coming on the heels of fresh technically based speculative buying, traders said.

Routine exporter pricing was evident and helped to generate some support for canola.

Firmness in the North American equity and energy markets was also viewed as an underpinning price influence.

The upside in canola, however, was being limited by the upsurge in the value of the Canadian dollar with the currency trading around the 92 US cent level Monday at midmorning.

The strong Canadian dollar was seen curbing domestic processor demand for canola and preventing exporters from putting fresh export business on the books, traders said.

There were an estimated 8,510 canola contracts traded at 10:47 CDT.

At 10:47 CDT, no western barley futures had changed hands.

Prices in Canadian dollars per metric ton at 10:47 am CDT: