ICE Canola Moves Up On Fund Short-covering

The activity in canola was confined to the November, January and March contracts.

Early weakness in canola had been associated with the losses seen overnight in Malaysian palm oil and European rapeseed futures, traders said. The absence of fresh export demand combined with strength in the Canadian dollar also sparked some early selling of canola.

Contributing to the early weakness in canola were the losses seen in CBOT soybean and soyoil futures with the start of the North American day session.

However, when CBOT soybean values began to move up the losses in canola were also erased.

"Canola began to move up and the push to higher ground appeared to be in chunks," a broker said, explaining that a large buy order from the commercial sector came at select intervals. The broker felt the buying was covering previously sold positions by fund accounts.

Some support in canola also came from the pricing of old export business and light, but steady demand from domestic processors, traders said.

Ongoing concerns about the lateness of this year’s canola crop, and the potential for an early frost, also provided some underlying support, traders added.

There were an estimated 2,605 canola contracts traded at 10:33 CDT. Of the contracts traded 88 were spread related.

There were 68 western barley futures traded as of 10:33 CDT. Much of the weakness in western barley was linked to reports Monday that the Rogers Commodity Index would remove the ICE barley contract from its index, due to the lack of liquidity, brokers said. Traders here said that this would effectively eliminate any speculative interest remaining in the commodity.

Prices in Canadian dollars per metric ton at 10:33 am CDT: