ICE Canola Futures Climb On Oversold Sentiment

Helping to underpin canola futures were the overnight advances seen in the e-CBOT complex and in European rapeseed, brokers said. Gains in the outside markets, including global crude oil, were also generating some of the upward price movement in canola.

The covering of previously sold positions ahead of the North American Labor Day long holiday weekend also contributed some support to canola futures.

Some of the buying in canola also came in anticipation of a higher start in CBOT soybean and soyoil futures with the start of the North American day session, traders said.

Steady domestic crusher demand and the pricing of previously conducted export business were also providing a firm floor for canola early Thursday.

The upside in canola was being limited by the good weather conditions for the development of the crop across much of western Canada.

Brokers noted that some canola harvest activity is underway, thanks to the warm, dry conditions across the Canadian prairies.

Increased country movement was also limiting the upside in canola with farmers cleaning out their bins of old crop supplies ahead of the harvest. The need for cash flow is also stimulating selling. The favourable weather outlook pressured the market with most traders revising their canola crop estimates higher, traders said.

The charts for canola also continue to be bearish, which was seen tempering the advances in canola.

Funds have also been active sellers the past 2 days and now hold a net short in the canola market.

As of 9:50 am EDT, there were 6,111 canola contracts traded.

As of 9:50 EDT, no western barley contracts had changed hands.