ICE Canola Higher, Recovering From Monday’s Losses

A broker said Monday’s sell-off in canola was overdone, which led to a technical correction higher on Tuesday. A weaker tone in the Canadian dollar contributed to the firmer tone in canola, making the commodity more attractive to end users.

From a technical standpoint, the broker thought canola was trending higher, although it was stuck in a range for the time being. He said the January contract would need to break above C$411 per metric ton to be considered bullish, while a move below C$397 per ton would be a bearish sign.

Light exporter pricing of routine business and a lack of farmer selling also provided some underlying support for canola, according to traders.

A slightly weaker tone in CBOT soybeans limited the upside in canola.

At 10:57 CST, about 7,000 canola contracts had changed hands, with the January/March spread accounting for over half of the contracts traded. A broker said that grain companies were the main buyers of the spread while domestic crushers were on the sell side.

Activity was described as light, with many participants reluctant to put on positions ahead of the US Thanksgiving holiday that will see activity in the US markets slow down for most of the week.

Western barley futures were untraded and unchanged at midsession.

Prices in Canadian dollars per metric ton at 10:57 CST: