ICE Canola Lifted By Charts, US Soy

Canola saw an active trade with moderate amounts of intermonth spreading evident.

The total canola volume was estimated at 15,574 contracts, down from Tuesday’s 17,174 contracts, including an estimated 8,134 contracts involved in the spread trade.

Canola was higher in the overnight session in response to gains in the international vegetable oil markets. Canola held onto its gains as the North American trading session opened and the CBOT soy complex rallied. Canola ended with small gains.

Canola drew support from friendly technical signals which prompted speculative buying. Traders noted that the July contract had bounced off of its 20 day moving average on Tuesday, a strong signal in the past that the market was going to rally. A slower pace to farmer selling also gave support as did the strong upward surge in CBOT soybeans, traders said.

However, canola’s gains were much smaller than the US soybean market with the more modest strength in CBOT soyoil restraining the canola gains.
Also weighing on canola was the very strong Canadian dollar and easing canola crush margins in China which has limited aggressive exporter interest. The news of Chinese cancellations of US soybeans are making traders nervous as they fear that China may also cancel some canola purchases.

Crushers were strong buyers with only routine exporter buying noted. Commodity funds were good buyers taking between 1,500 and 3,000 July contracts. The selling was mainly commercial with farmer selling light.

Western barley ended higher in light commercial trade. The choppiness in futures prices
reflected the large gyrations in the cash market with the lack of farmer selling lifting the market at the close.

The total barley volumes were estimated at 275 contracts, up from 153 contracts on Tuesday, including an estimated 226 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: