ICE Canola Firms On Outside Markets

Trading volumes were quite light as only 158 contracts had traded by 08:28 CDT. Brokers felt activity will be subdued until the end of the month as traders assess crop conditions. Also many participants are away on holidays, they noted.

Canola edged higher in the overnight trade as a firming tone appeared in outside markets with crude oil and equity markets posting gains. Stronger prices for palm oil also gave some support..

Canola is expected to hold its gains and extend them as the North American trading session opens and the Chicago Board of Trade soy complex rallies, traders said.

Giving further support to the market was slower pace to farmer selling and firm commercial demand.
Continued stress in the canola crop, as a result of weather, was supportive, but was partially offset by ideas that weather conditions have improved and that the crop has also seen an improvement.

Technically, it is felt that canola has put in some lows and the market is likely to bounce higher on ideas it is oversold.

Trade so far has been comprised of very thin commercial activity. Analysts feel that more commodity fund liquidation selling might appear in the Nov contract to limit the upside in the market.

Western barley futures are expected to see a choppy session in thin trade with prices under pressure from the recent declines in feed grains and sluggish demand.
The Oct contract will be dominated by the need to liquidate open interest while the Nov contract will reflect the sluggish demand from the Southern Alberta livestock industry.

Prices at 08:40 CDT in Canadian dollars per metric ton: