ICE Canola Moves Higher Overnight on Vegetable Oil Support

A firm tone overnight in vegetable oil values was supportive for canola, with Malaysian palm oil, European rapeseed, Chinese rapeseed futures and e-CBOT soybeans all posting advances.

Canola’s upward price action was encouraged as well by firm equities and gains in crude oil futures, traders said.

Higher opening calls for Chicago soybeans (up to 10 US cents a bushel) with the start of the North American session further encouraged buying interest in canola and may extend canola’s early advances, traders said.

For Wednesday’s session, a bullish supply situation for old crop US soybeans and talk that Argentina’s soybean production will come in near the 31 to 32 million metric ton mark are supportive for North American oilseed prices.

Firm domestic crush margins and friendly technical signals will underpin canola values as well.

However, the Canadian dollar is expected by traders to be a considerable limiting influence in the canola market Wednesday. In early activity, the Canadian dollar was trading at over 85 US cents.

Early forecasts Wednesday differ in their rainfall projections for the next week. Depending on which forecasts the trade focusses on, canola could find support tied to concerns about soybean seeding delays, market watchers said.

There was moderate early activity in canola, with 1,494 contracts traded as of 9:01 CDT.

Meanwhile, a lack of interest in the western barley market as of 9:01 CDT left values unchanged from Tuesday’s closing values.

Prices in Canadian dollars per metric ton at 9:01 CDT: