ICE Canola Lifted US Soy Gains

Canola saw a moderate trade with light intermonth spreading evident.
Positioning was noted ahead of Wednesday’s Statistics Canada grain stocks report. The report will confirm the level of ending stocks for canola and barley in 2008-09.

The total canola volume was estimated at 8,205 contracts, down from 14,155 contracts on Friday, including an estimated 524 contracts involved in the spread trade.

Canola was higher in the overnight market reflecting firmness in international vegetable oil prices. Canola held onto small gains as the North American trading session opened and the CBOT soy complex posted moderate gains. Canola turned choppy and mixed during the session, but firmed in the last 90 minutes, ending a bit higher.

Canola was supported by the gains in the US soy complex and ideas that canola was oversold after dropping over 15% last week. Also giving support was a slower pace to farmer selling as farm gate bids have dropped below C$9.00/bu in much of western Canada. Talk of cool conditions appearing in western Canada by the end of the week also gave some support as canola crop development still lags.

Weighing on the market was the advancing harvest, the very strong Canadian dollar as it hit a 5 week high against the US dollar and the sluggish pace to fresh export bookings, traders said.

Exporter and crusher buying met mainly commercial selling. There was small speculative activity on both sides of the market.

Western barley ended mixed in light trade.
The Oct contract was lifted by short covering amid sluggish selling as the contract specifications have changed for the contract.
The Nov contract was down sharply on the advancing harvest, sluggish demand and competition from other feed sources, including DDG’s. Commercials dominated the trade.

The total barley volume was estimated at 107 contracts, up from 98 contracts on Friday, including an estimated 10 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: