ICE Canola Firms On Late US Soy Rally

Canola saw a light trade with light intermonth spreading noted.

The total canola volume was estimated at 10,937 contracts, down from Friday’s 12,918 contracts.

Canola was higher in the overnight trade, reflecting the firm tone in international vegetable oil markets. The market extended its rally as the North American trading session got underway and the Chicago Board of Trade soy complex opened higher, traders said. Canola started to soften and give back its gains about midmorning with prices ending mainly a bit higher in a choppy trade.

Canola was initially supported by optimism that Canadian and Chinese sources were resolving the problems in canola trade.
China announced in late October that it would not accept any canola contaminated with the fungus blackleg after Nov 15th. Talk was that the two sides had decided to move the date for the rules to come into effect back while the two sides negotiated further.

The rally turned technical factors friendly and triggered some aggressive speculative buying which took Jan canola back to its pre-export problems highs.

As the session progressed canola started to drop back as the firm Canadian dollar and expectations for aggressive harvesting progress in Saskatchewan this week weighed prices.
Uncertainty about Canada and China resolving their export problems eventually led to selling that sent prices down, analysts said.

Near the close of trade the Canola Council of Canada announced that there was no new agreement in place and that the Chinese government was reluctant to accept Canada’s arguments or extend the Nov 15th deadline.

In the last 5 minutes, CBOT soy complex rallied and that pulled canola to small gains.

Exporter and crusher buying was augmented by commodity fund short covering. The selling came mainly from commercials with elevator companies stepping up their selling, said cash dealers.

Western barley ended higher in light trade. The lack of farmer selling and steady feed lot pricing lifted the market, brokers said. However, they felt in the low volumes the price movement was not significant.

The total barley volume was estimated at 49 contracts, down from 124 contracts on Friday.

Prices are in Canadian dollars per metric ton: