ICE Canola Firmer, But China Issue Keeping Trade Choppy

Canola futures dropped sharply on Thursday following reports that China would require stiff phytosanitary certificates on Canadian canola by November 15. There were also rumours that a number of sales were already canceled, although export sources said that wasn’t the case. The Canadian Food Inspection Agency and the Canola Council of Canada are working to come up with a solution to the issue, but in the meantime there are too many unknowns in the market, said a broker. While canola was showing some recovery from Thursday’s declines, the uncertainty was keeping many buyers on the sidelines, he added.

"Canola is filthy cheap," commented the broker. He thought other export customers, such as Japan and Mexico, "should be jumping all over this." However, for the time being he thought any buying was subdued.

Ongoing harvest delays to the last of the canola crop, with 1.5 million to 2 million tons of canola still thought to be in the fields, was also supportive for canola, according to the broker.

The late harvest and the recent downturn in prices was keeping farmer selling relatively light, according to the broker. He said most producers were now of the opinion that prices should be going higher.

The CBOT soy complex was mixed at midday Friday, with gains in soybeans and soymeal, but a weaker tone in soyoil.

At 11:02 CDT, about 7,200 canola contracts had changed hands, with the Nov/Jan spread only a minor feature on the day.

Western barley futures were untraded and unchanged at midsession.

Prices in Canadian dollars per metric ton at 11:02 CDT: