ICE Canola Firms on CBOT Soybean Strength

"Canola is caught in a bit of a trap…the US dollar is significantly lower which in turn is boosting CBOT soybean and soyoil values and subsequently canola," a broker commented. "However, with the value of the US dollar declining, the Canadian dollar has appreciated significantly and in turn is capping the upside potential in canola as it makes the commodity more expensive to buy."

Gains overnight in canola were associated with the advances posted by Malaysian palm oil and Matif rapeseed futures. Gains in global crude oil and the firm tone in North American equity markets were helping to underpin canola values, brokers said.

Domestic processor demand was evident, but the interest was lighter than it has been in recent days, traders said. The pricing of old export business by commercials was also helping to stimulate some support in canola.

Friendly chart signals contributed some strength to the market as did the easing of concern surrounding the swine flu outbreak, traders said.

Besides the strong Canadian dollar, the advances in canola were also being limited by reports that China has cancelled at least five recent purchases of US soybeans with as many as 12 possible, brokers said. They noted that speculation in the trade is that if China was cancelling soybean purchases, some canola purchases could also be voided.

The lack of fresh export business being put on the books helped to temper the price gains in canola.

There were an estimated 8,082 canola contracts traded at 10:58 CDT.

At 10:58 CDT, 234 western barley futures had changed hands. Traders said it only took a small amount of sell orders from commercials to push values down in the absence of willing buyers.

Prices in Canadian dollars per metric ton at 10:58 am CDT: