ICE Canola Firm Ahead Of Crop Report

Canola saw a moderate trade with intermonth spreading enhancing the volumes. Positioning was evident ahead of the StatsCan report.

The total canola volume was estimated at 15,242 contracts, up from Wednesday’s 13,848 contracts.

Canola was thinly traded and narrowly mixed in the overnight trade as the harvest was balanced off by a firm tone in international vegetable oil markets. Canola turned lower as the North American trading session got underway and the Chicago Board of Trade soybean market posted losses. Canola ended mostly higher, rallying in the last 15 minutes of the session.

Canola was pressured down for most of the day by the weak tone in CBOT soybean futures, the advancing harvest and expectations that Statistics Canada will report a larger canola crop in Friday’s report. Bearish technical signals prompted some selling as well.

However, canola did not mirror the declines in the US market as commercial demand gave support accounting for small gains at the close. Crusher buying was prompted by improved crush margins as CBOT soyoil futures rallied and the Canadian dollar dropped sharply. There was also continued strong interest from exporters giving support, although no fresh export activity was confirmed.

Commission house short covering ahead of the report was noted, brokers said. "A lot of guys are a little nervous about being short this market (Nov canola) with all the bearish news already built in, so they’re doing some covering and taking their profits," said a broker.

Crusher and exporter buying was enhanced by commission house short covering with commercials providing the bulk of the offerings. Early elevator company selling slowed and that also allowed the market to move to small gains, analysts said.

Western barley ended little changed in light trade. The weak tone in CBOT corn and expectations for a larger barley forecast in Friday’s StatsCan report was balanced off by the lack of farmer selling, brokers said.

The total barley volume was estimated at 36 contracts, down from 122 contracts on Wednesday.

Prices are in Canadian dollars per metric ton: