ICE Canola Moves Higher But Lags E-CBOT Soybean Gains

In overnight activity, canola took its cue from e-CBOT soybeans, which bounced higher after correcting lower on Wednesday, market watchers said. However, canola’s gains lagged those seen e-CBOT soybeans as the canola market did not fall as sharply as Chicago soybean futures did yesterday and did not seem as oversold.

Higher equities and stronger crude oil futures overnight made for a friendly combination, which also encouraged light buying in the market.

With Chicago soybeans called 10 US cents a bushel higher at the start of North American trade, traders said canola’s early advances may grow.

Further support will be tied to the unfavourable growing conditions seen in parts of western Canada. The Canola Council of Canada said seeding is virtually complete in Alberta and Saskatchewan but where it is dry, germination is stalled. Those areas which are wet enough are experiencing stalled growth and development due to very cool, and in some cases record low, temperatures.

In Manitoba, which experienced flooding this spring, planting delays are causing concern. The CCC said canola seeding varies from 5% to 100% complete.

Commercial buying, tied to the covering of routine export business and the absence of heavy farmer selling will help lift canola prices as well, traders said.

The Canadian dollar, however, has started to turn higher again Thursday after dropping nearly 2 US cents yesterday and further strength will limit canola’s upward climb, market watchers said.

The lack of fresh export business will also temper the market’s strength.

Early interest in canola was very light, with only 404 contracts having changed hands as of 9:05 CDT.

Western barley futures were unchanged and untraded as of 9:05 CDT. The often thinly traded market could see changes in the near future in an attempt to bring more trading interest to the commodity, industry and exchange participants believe.

Speaking June 3, Brad Vannan, president and CEO of ICE Futures Canada, said the process of making changes to the barley contract has not yet been completed but should be finalized "very soon".

Prices in Canadian dollars per metric ton at 9:05 CDT: