ICE Canola Firms As Farmer Deliveries Dry Up

"Producers have essentially locked up their bins and are refusing to sell any old crop canola they may have until a better handle on what their new crop will look like," a broker said. "Commercials in the meantime, have had to slowly narrow in their basis bids for canola in hopes of attracting deliveries so they can meet existing export commitments."

Only about 25% of western Canada’s canola crop was said to be developing normally with the remainder having suffered frost damage or was well behind normal in terms of development. Canola fields in western Canada were estimated to be 10 to 14 days behind normal in development in some locations.

Light local and commercial buying helped to encourage some of the overnight advances seen in canola as did the gains seen in e-CBOT soybean values. Strength overnight in global crude oil was also seen as an underpinning price influence.

The advances in canola were also being helped along by the gains in CBOT soybean futures. Routine exporter pricing of old business was also supportive, brokers said.

The upside price momentum in canola was being restricted in part by the declines in CBOT soyoil futures and the drop off in demand from the domestic and export sectors.

Traders noted that domestic crushers have covered nearby needs and have taken to the sidelines to await the arrival of new crop canola supplies. China, meanwhile, has backed away from the market, leaving a void in the ability of Canada to make additional sales.

There were an estimated 7,761 canola contracts traded at 10:44 CDT. Some of the volume was said to be made up of spread trades.

There were 386 western barley futures traded as of 10:44 CDT of which most was said to be spread related.

Much of the activity in western barley was the unloading of positions by participants ahead of the new barley contracts coming on the board June 22, brokers said.

Prices in Canadian dollars per metric ton at 10:44 am CDT: