ICE Canola Firm In Dull Seasonal Trade

Canola volumes continued to be small with traders blaming it on the upcoming Christmas season, frigid conditions across western Canada and farmers desire to defer revenue into the new tax year.
As of 08:25 EST an estimated 298 contracts had traded.

Canola spent the bulk of the overnight session in positive ground prompted by the firm tone in e-cbot soy complex futures. Canola continued to be higher in the most active contracts ahead of the opening of the North American trading session and expectations for the US soy complex to open higher, traders said.

Canola was drawing some support from the lack of country movement and a weakening in the Canadian dollar.
However, weighing on the market was a seasonal slow down in demand and the large canola supplies in western Canada .

On Tuesday afternoon, Ag Canada brought out its latest supply-demand report pegging 2009-10 canola ending stocks at 2.15 mln metric tons, up from their previous forecast of 750,000 tons and last year’s 1.661 mln tons.
A revision higher in production accounted for the increase.

Traders feel that the canola market will generally be firmer today in the lack of news with the market drawing much of its support from the expected gains in the US soy complex and the absence of any significant selling pressure. However, they are looking for gains of no more than C$1-$2 per ton.

"This is a dead dead market and sideways is likely to be the order of the day", said a broker.

Commercials have dominated the small early activity.

Western barley is unchanged and untraded with end user bidding well under Tuesday’s close as milder weather conditions developing across western Canada will educe livestock ration demand, analysts said.

Prices at 08:40 CST in Canadian dollars per metric ton: