ICE Canola Futures Up On Oversold Ideas, Outside Gains

By Dwayne Klassen, Resource News International October 6, 2009 Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly higher price levels as of 9:43 EDT. Sentiment that canola futures were due for an upward correction after recent declines helped to bolster values as did the advances seen in the outside oilseed sector, market watchers said. The e-CBOT soybean complex moved higher overnight with gains also posted in European rapeseed futures and Malaysian palm oil, brokers said. Some of the advances 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. Gains in the global crude oil market were also seen as a supportive price influence. The upside in canola was also expected to be helped along by the pricing of old export business and talk that values had dropped low enough to stimulate some fresh exporter demand, traders said. The upside in canola will be limited by indications the harvest is nearly complete across the Canadian prairies and sentiment the canola crop in Canada is a lot larger than had been anticipated. Most market participants are working with a canola crop size of around 11.0 million metric tons, which is up from the October estimate from Statistics Canada of 10.2 million. Strength in the Canadian dollar early Tuesday was seen as an undermining price influence, as the strong currency is known to scare off potential canola buyers, brokers said. Continued problems in exporting canola meal into the US has also resulted in demand from domestic crushers being reduced, traders said. Hedge selling by elevator companies was also seen as an undermining price influence for canola. As of 9:43 am EDT, there were 1,205 canola contracts traded. As of 9:43 am EDT, no western barley contracts had been traded.