ICE Canola Climbs On Weather Concerns, CBOT Rally

Early support in canola came from the overnight advances seen in e-CBOT soybean values as well as from higher equities and stronger crude oil futures.

Gains in canola also came in response to the strength displayed by CBOT soybean and soyoil values with the start of the North American day session, brokers said.

The need to keep a weather premium built into the market contributed to the upward price momentum in canola, traders said.

They noted that frost damage on canola crops in western Canada earlier this week was probably minimal at best but outlooks expecting the cold temperatures to return to the area by the weekend was causing some unease among market participants.

The arrival of some precipitation in the previously dry growing regions of western Canada early Thursday morning was an undermining price influence, but brokers were indicating that the moisture still missed some areas and was not enough to alleviate the dry conditions.

Contributing to the support in canola was routine exporter pricing and some covering of requirements by domestic processors, traders said. The absence of significant farmer selling was also helping to provide a firm floor for canola futures.

The upside in canola was being limited by an upward rebound in the value of the Canadian dollar
Thursday. The absence of fresh export business was also tempering the upside in canola. Traders indicated that Chinese demand for Canadian canola has disappeared.

The rolling out of the nearby July contract and into the November future by commodity fund accounts continued to be a feature of the activity seen in canola.

There were an estimated 4,733 canola contracts traded at 10:43 CDT. Of the contracts traded, 2,602 were spread related.

At 10:43 CDT, no western barley futures had changed hands.

Prices in Canadian dollars per metric ton at 10:43 am CDT: