ICE Canola Lifted By Slow Farmer Selling

Canola saw a moderate trade with intermonth spreading accounting for much of the volume. There was some positioning ahead of Thursday afternoon’s Canadian Wheat Board weather and crop production report.

The total canola volume was estimated at 13,285 contracts, down from 15,161 contracts on Wednesday, including an estimated 9,624 contracts involved in the spread trade.

Canola was higher in the overnight market, prompted by gains in international vegetable oil prices. Canola extended its gains as the North American trading session began and the CBOT soy complex surged higher. Canola backed down from its highs shortly after the opening, closing with modest gains.

Canola drew support from the complete lack of farmer selling as producers assess their new crop, before making any further old crop canola sales, cash dealers said. The big gains in CBOT soybeans, friendly technical signals and the advances in crude oil also helped to lift the market.

However, canola’s gains were much smaller than the US soybean market as the weakness in CBOT soyoil, the very strong Canadian dollar and sluggish fresh demand restrained the advance. Crush margins continue to erode sidelining crusher interest. Exporters have indicated that China has withdrawn from the market for new business with the only export demand they are expecting is some routine buying out of Mexico.

Routine exporter and crusher buying was augmented by some early speculative buying, thought to be commodity fund. The selling was mainly commercial.

Western barley futures posted losses in light trade with the bulk of the activity being intermonth spreading. The lack of interest in the soon to be replaced barley futures contract accounted for the decline, brokers said.

The total barley volume was estimated at 386 contracts, up from Wednesday’s 2 contracts, including an estimated 386 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: