ICE Canola Lifted By US Soy Rally

Canola volumes were moderate with intermonth spreading augmenting the activity.

The total canola volume was estimated at 10,408 contracts, down from 19,509 contracts on Wednesday.

Canola was higher in the overnight market, supported by the firm tone in international vegetable oil prices. Canola held onto gains as the North American trading session opened and the CBOT soy complex rallied. Canola ended the day higher.

Canola was lifted by the big gains in the US soy complex, slow farmer selling and continued harvest delays, brokers said. Friendly technical signals also gave some support.
Traders noted the rebound in the Jan canola futures contract was encouraging considering the lingering concern about canola exports to China, following their demand for canola from Canada to be blackleg free.

"The Jan contract has come back $14/metric ton from its lows and we are only $9.00 from the high we were at when the Chinese announced the new blackleg rules for canola.
Given that China is our largest canola export market and this rule threatens those exports the rebound is actually quite impressive", said a trader.

Capping the advance and keeping the gains in canola smaller than the US dollar was the very strong Canadian dollar and the lingering uncertainty about canola exports to China. Some selling also appeared as the Jan contract approached the significant resistance at the $400/metric ton level.

Crushers were strong buyers with exporter buying also noted. The selling was mainly commercial with speculators appearing on both sides of the market.

Western barley futures ended lower in the Nov contracts and unchanged in the rest of the market. Trade was light and focused in the Nov contract.

Activity in the Nov contract was dominated by evening up ahead of the Nov contract becoming the cash month next week and that accounted for some choppiness.

The remainder of the market was unchanged and untraded amid a lack of interest, brokers said.

The total barley volume was estimated at 31 contracts, down from Wednesday’s 313 contracts.

Prices are in Canadian dollars per metric ton: