ICE Canola Follows Soybeans Higher But C$ Weighs

In a continuation of Tuesday’s strength, e-CBOT soybean futures posted double-digit advances. Canola prices moved higher in response but was limited to minor gains by the strength of the Canadian dollar.

The firm overnight tone in canola also reflected the advances seen in overseas stock markets, higher crude oil futures and gains in European rapeseed values, market watchers said.

CBOT soybeans are expected to open 10 to 15 US cents a bushel higher once North American trade gets underway in Chicago, which could extend canola’s early gains, brokers said. Canola will be underpinned by the bullish momentum currently backing soybean futures, they said.

Additional support for canola is tied to the commodity’s friendly chart signals. Traders said the nearby July contract could make a run up to the $500 a tonne mark.

Grains and oilseeds generally will be lifted by speculators looking to add long positions provided outside markets continue to work their way higher.

However, market watchers warned that canola will be undermined by the surging Canadian dollar, which was above 87 US cents in early trade. Further upward price action in canola futures may also attract more deliveries into the commercial pipeline if farmers take advantage of attractive cash prices.

Improved weather in many western Canadian regions this week should also give producers the opportunity to seed quite a few canola acres, traders said.

Early volumes in canola were moderate, with 783 contracts traded at 9:04 CDT.

Meanwhile, the absence of interest in the western barley market left values untraded and unchanged from Tuesday as of 9:04 CDT.

Prices in Canadian dollars per metric ton at 9:04 CDT: