ICE Canola Lifted By US Soy In Consolidation Trade

Canola saw light volumes and very light intermonth spread activity. The total canola volume at 11:21 CDT was estimated at 2,765 contracts. Activity was subdued as many participants have taken to the sidelines ahead of the Canadian long weekend which will see ICE Canada closed on Monday while the Chicago Board of Trade is open.

Canola was modestly higher in thin choppy trade. End-of-week and month-end positioning was noted accounting for some of the choppiness. The firm tone in CBOT soybeans gave support, but was partially offset by the softer tone in soyoil futures, said traders. Consolidation trading after the biggest one day gain of the year also was evident.

Canola was also supported by steady commercial demand and the need for a weather risk premium as the crop heads into August. Cold conditions in western Canada have forecasters calling for an early frost which will catch the canola crop in a vulnerable state as it is as much as 2 – 4 weeks late in development, traders said. In addition, dry conditions in Alberta are once again becoming a problem for the crop, said the Canola Council of Canada.

Improved crush margins have given some support as has continued talk of Chinese buying interest in canola.

Weighing on the market was the unaggresive nature of the commercial demand. "They’re (commercials) are not really chasing the market, they are just biding there time and picking up the offers," said a broker. The firm Canadian dollar pressured values down as well.

Exporters and crushers supplied the bulk of the buying in the thin trade with commercials the main sellers.
Farmer selling was light.

Western barley posted losses in light trade. The market was undermined by ideas barley futures were overvalued after yesterday’s big rally as the southern Alberta cash market was trading below Thursday’s closing price, brokers said.

The total barley volume at 11:19 CDT was estimated at 58 contracts.

Prices at 11:19 CDT in Canadian dollars per metric ton: