ICE Canola Firm, But Lacking Clear Direction

Sharp weakness in the Canadian dollar was providing some of the underlying support for canola on Wednesday, said a broker. He said the overall product values for canola were also higher, likely bringing some end user interest into the market.

The CBOT soy complex was mixed, with losses in soybeans and soyoil, but gains in soymeal, providing little direction for canola on the day.

"It’s hard to say where this market will go," said the canola broker adding that "you can be either bullish or bearish on canola right now."

On the bearish side is the ongoing uncertainty of sales to China, given the recent news that the country will require strict phytosanitary certificates for canola imports. While Canada is working to resolve the situation, in the meantime the broker thought the uncertainty was causing speculators to put their money in other, less uncertain, markets.

On the bullish side of the market are the ongoing harvest delays in western Canada, where up to two million tons of canola are still waiting to be harvested, said the broker.

At 10:45 CDT, about 6,000 canola contracts had changed hands. The Nov/Jan spread was a feature as participants continue to roll out of the nearby November contract ahead of first deliveries next week.

Western barley futures were mixed at midsession, with losses in the nearby November contract, but gains in the more deferred positions. Spreading was a feature of the roughly 200 contracts traded.

Prices in Canadian dollars per metric ton at 10:45 CDT: