ICE Canola Firms As Domestic Demand Buoys Values

Canola futures had moved higher overnight in response to the firm price tone in overseas vegetable oil prices. Sentiment that the losses seen in canola on Monday were overdone, also influenced some buying during the overnight session, brokers said.

Helping to keep a firm price under canola was the absence of significant farmer deliveries and the pricing of routine export business to Japan and Mexico by commercial accounts.

Some light fund buying was also evident and helped to underpin canola, brokers said.

Weakness in the Canadian dollar was also viewed as a minor supportive price influence.

The upside in canola was being limited by the lack of fresh export business being put on the books. Weakness in crude oil values and ongoing concerns regarding the swine flu outbreak helped to undermine values, traders said

They noted that the swine flue news had subsided to some degree overnight but the worries and uncertainty were again fueled when the World Health Organization raised its alarm level for the swine flu outbreak. The inability to contain the spread of the swine flu outbreak was also adding to the concern.

Swine flu is a respiratory disease that’s caused by a type-A influenza virus. It has killed as many as 152 people in Mexico and struck 40 people in the US and 8 in Canada.

Some weakness in canola had also been tied to the downturn seen in CBOT soybean and soyoil values after both commodities had opened with advances. Soybeans have since turned mostly higher but some soyoil values continue to post declines.

There were an estimated 12,240 canola contracts traded at 11:05 CDT.

At 11:05 CDT, 70 western barley futures had changed hands. Light commercial offerings amid a lack of willing buyers allowed prices to move down, brokers said.

Prices in Canadian dollars per metric ton at 11:05 am CDT: