ICE Canola Mixed Ahead Of Long Weekend

Canola activity was moderate with traders expecting a choppy trade ahead of the North American long holiday weekend. As of 08:51 DT an estimate 1,141 canola contracts had traded.

Canola initially weakened in overnight trade but rallied back on the strength of international vegetable oil prices and on ideas the market was still oversold after this week’s large declines, traders said. Canola is expected to continue to be narrowly mixed as the North American trading session gets underway with the Chicago Board of Trade soy complex expected to be narrowly mixed in a consolidation trade ahead of the Labour Day weekend, traders said.

Canola is expected to see a firm tone in a choppy trade. However traders are not looking for a large price move in either direction. There is little fresh news to drive the market and Thursday’s strong performance in the face of the weak US soy market is expected to underpin values.
Continued talk of export interest was noted, although this morning’s rally in the Canadian dollar has dampened some of the expectation for more buying.

Weighing on the market will be the favourable crop outlook, the advancing harvest, steady country selling and the firm Canadian dollar. "Everyone’s moved their (canola) crop estimate above the StatsCan estimate of 9.5 mln (metric) tons after this week’s weather with most being around the 10 – 10.5 mln ton area," said a trader.

Giving some support was continued talk of export interest. Traders said that either Pakistan or China took a cargo of canola this week. They noted that "China doesn’t usually just take one cargo when they buy."
Weather continues to linger as a supportive factor as the crop is still vulnerable to frost.
Weather forecasters say that the first chance of frost is about the middle of next week in northern and central Alberta.

Western barley is expected to see a choppy thin trade with the overall tone weak.
There is little fresh news and the soft tone in feed grain markets and the advancing barley harvest will keep the market on the defensive, say brokers.

As on 08:48 CDT, no contracts had traded in barley.
End user bids sit C$2- $6 under Thursday’s close.

Prices at 08:49 CDT in Canadian dollars per metric ton: