ICE Canola Firm On Soyoil Gains, Strong Demand

Canola saw a moderate trade with an estimated 6,596 contracts traded as of 11:40 CDT.

Canola was mainly a bit higher as the firm tone in the soyoil markets gave solid support, traders said. They also indicated that canola was also catching up to Tuesday’s big rally in CBOT soyoil, which was not fully reflected in the Tuesday canola rally.

Contributing to the strength were significant problems with the Alberta canola crop, said brokers. Solid commercial demand is thought to reflect a strong export program this fall and an aggressive crush pace. Friendly technical signals and strong crude oil markets contributed to the advance.

Capping the rally was the very strong Canadian dollar, the favourable growing conditions for crops in Manitoba and Saskatchewan and increased country movement.
Cash bids have hit the $10.00/bu level in much of western Canada which has attracted in some farmer selling as producers clean bins ahead of harvest.

Also weighing on the market was some selling on ideas that Tuesday’s gains were overdone.

Traders largely discounted the talk of frost on the prairies on Aug 20th. "I’m not saying there won’t be a frost, but over a week ahead of that date..you can’t trust the forecasts", said a broker. "I certainly wouldn’t want to trade on that story", he added.

Exporter, crusher and speculative buying met commercial selling and profit taking. Country movement was described as light but steady.

Western barley posted losses in light trade. The sluggish demand weighed on prices with end users thought to be reluctant buyers on ideas that there will be large feed supplies in western Canada this year, particularly if a frost occurs, said brokers.

The estimated barley volume at 11:40 CDT was 110 contracts.

Prices at 11:40 CDT in Canadian dollars per metric ton: