ICE Canola Firm On Monday’s Gains At CBOT

Canola saw a moderate trade with year end positioning noted in the March contract. The total canola volume at 08:19 EST was 2,599 contrasts.
Some traders were surprised at the level of participation in the March contract given the traditionally lower volumes at Christmas time.

Canola saw solid gains early in the session in reaction to Monday’s advances in CBOT soy complex futures. However, as the US market gave back some of those gains in the overnight trade canola gains faded back to just moderate levels. Canola is expected to hold onto gains Tuesday drawing much of its support from Monday’s CBOT rally.

Keeping canola in check will be the expected retreat in the US soy complex as it corrects lower following Monday’s big gains. Also weighing on the canola market will be the firm Canadian dollar and the favourable outlook for the South American soybean crop.

However overall, canola is expected to see gains on Tuesday as the slow pace to farmer selling will give support as will the ability of the March contract to continue to trade in its trading range, said brokers.

There is little fresh news to drive the canola market this morning. The Canadian dollar has faded back from sharp gains and that is a supportive factor as well.

Activity is expected to be dominated by commercials although some brokers felt that some fund positioning could occur ahead of year end. There is some caution in the canola market on expectations that fund positioning re-balancing will boost canola in the new year, traders said.

Western barley is untraded and unchanged amid a lack of interest.

Prices at 08:35 CST in Canadian dollars per metric ton: