ICE Canola Contracts Climb On Weak C$/Soyoil Gains

Activity consisted of position evening ahead of the Canada Day holiday on Thursday in which the ICE Canada Futures trading platform will be closed. Some evening up of positions ahead of the US long holiday weekend also was a feature of the trade.

Some of the early strength in canola came from sentiment that the losses seen on Tuesday were overdone and that an upward correction was needed, brokers said.

Ongoing uncertainty surrounding Canada’s canola production also continued to fuel some upward price momentum in the commodity. Traders noted that rain moving across Saskatchewan was not seen as beneficial for canola crops still trying to recover from recent heavy precipitation. Dryness concerns in the canola growing regions of Northern Alberta also are continuing and were seen stressing crops in that area, they said.

The absence of significant farmer deliveries of canola into the cash pipeline in western Canada was also an underpinning price influence, traders said. Producers were restricting sales due to the uncertain production outlook.

Steady domestic crusher demand helped to stimulate some of the upward price action as did the pricing of old Canadian canola sales to Japanese accounts, brokers said.

The weakness in the nearby July contract reflected liquidation selling ahead of that future becoming a cash delivery month, brokers said.

The upside in canola was being limited by bearish overhead technical signals.

There were an estimated 5,490 canola contracts traded at 10:27 CDT.

There were no western barley futures traded as of 10:27 CDT.