ICE canola futures climb on bullish U.S. soybean acres

Dwayne Klassen, Resource News International

March 31, 2009

Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly higher levels as of 9:49 EDT. Strength in canola was tied directly to the USDA’s 2009 US acreage intentions which revealed that a lot less soybeans would be planted than originally anticipated, market watchers said.

Canola also found some support overnight from the advances seen in Malaysian palm oil values. A firm start to the North American equity markets helped to provide some minor support.

Canola values also moved higher on the significantly firmer calls for CBOT soybean and soyoil futures with the start of the North American trading day, traders said. Market players here expected CBOT soybean values to be up at least 20 to 30 US cents a bushel on the open.

The USDA report revealed that US soybean producers intend to plant 76.0 million acres in 2009, up slightly from last year.
If realized, the US planted area would be the largest on record but still 3 to 4 million acres less than the trade expected.

Contributing to the firm price tone in canola will be steady domestic crusher demand, the absence of significant farmer deliveries and the routine pricing of export business to Japan and Mexico, traders said.

The upside in canola may be tempered by firmness in the Canadian dollar early Tuesday and the absence of fresh export business being put on the books, brokers said.

As of 9:49 am EDT, there were 2,151 canola contracts traded.

At 9:49 am EDT, no western barley contracts had traded with prices unchanged.

Prices in Canadian dollars per metric ton at 9:49 am EDT:

          Price    Change
Canola
     May     420.40 Up 6.70
     Jul     424.70 Up 6.20
     Nov     430.00 Up 5.60
 
Western Barley
     May     144.00 Unchanged
     Jul     151.00    unchanged