ICE Canola Firm On Overnight Rebound

Canola saw a light, mainly commercial, trade as an estimated 785 contracts had traded by 08:44 CDT.

Canola also drew support from the crop uncertainties following the poor early growing season across western Canada. Ideas that Monday’s losses were overdone in the face to the steep decline in the Canadian dollar also generated some support.

Canola is expected to hold its overnight gains as the North American trading session opens and the Chicago Board of Trade soy complex rallies. Traders are going to be looking to see if the selling, thought to be commodity fund, that weighed on the markets yesterday returns today.

Traders felt that Monday’s fund selling was part of the larger profit taking operations that occurred in many North American commodity markets on Monday and were not a sign of a bearish scenario for canola. They point to the tightening old crop supplies and expected tightness for the new crop as supportive.

Capping the advance in canola will be a modest advance this morning in the Canadian dollar and forecasts for improved weather in western Canada with previously wet cool areas getting warm to hot conditions.
The critically dry areas in western Saskatchewan and parts of Alberta are expected to see showers this week with better rains forecast for some of the dry areas by late in the week and into the weekend.
Crop observers indicate that solid rain is needed by the weekend for many of those crops.

Farmer selling saw some increase on Monday as the recent decline in prices triggered some panic farmer pricing, cash dealers said. However, it is felt that selling is now over and that farmer selling will slow, contributing to the firm tone.

Western barley futures are expected to be lightly trade and little changed as the market awaits the introduction of the revised contracts on June 22nd.

Prices at 08:42 CDT in Canadian dollars per metric ton: