ICE Canola Lifted By Demand

Canola saw a moderate trade with intermonth spreading augmenting the volume.

The total canola volume was estimated at 13,069 contracts, down from 13,499 contracts on Thursday, including an estimated 9,462 contracts involved in the spread trade.

Canola was firm in the overnight market supported by strength in international vegetable oil prices and on weakness in the Canadian dollar. Canola held onto its gains as the North American trading session got underway and the Chicago Board of Trade soybean market rallied.
However the US soy market turned lower about midmorning and that pressured canola back, although the market managed to end modestly higher.

Canola was supported by steady but unaggresive commercial demand. The firm tone in CBOT soyoil and the weak Canadian dollar improved crush margins and that prompted steady crusher demand, said traders. Routine exporter buying was also evident in the market.

Strong basis levels gave support with cash basis in Alberta C$10/metric ton over futures while in Manitoba it was as high as $13/under futures. The firm tone reflected a strong export pace with Nov exports forecast at 600,000 to 700,000 metric tons, according to exporters. They also noted that Dec through Feb export coverage is thin and that exporters are doing some pricing for those delivery periods.

Capping the rally and leading to the very choppy tone in the market was the expected advances in the harvest as weather is expected to be good this coming week in areas where the harvest has stalled.
An overall slower crush pace, as reported by the Canadian Oilseed Processors Association this morning, also contributed to selling pressure. Weakness in the CBOT soybean market prompted selling and cash dealers noted that the firm basis levels were attracting in heavier country movement.

Crushers were steady buyers with routine exporter pricing noted. The selling was mainly commercial from cash sources, analyst said. Commodity funds were largely sidelined.

Western barley was little changed to a bit higher in light to moderate trade. Most of the activity comprised of spread trading which accounted for the steady price tone in the market,
brokers said.

The total barley volumes were estimated at 473 contracts, up from Thursday’s 100 contracts including an estimated 466 contracts involved in the spread trade. .

Prices are in Canadian dollars per metric ton: