ICE Canola Narrowly Mixed In Light Activity

Overnight buying in canola reflected ideas that the USDA’s latest supply/demand report would confirm tight US soybean supplies, although many participants took to the side lines ahead of the report’s release.

When the report was published early Wednesday, its soybean figures were neutral to slightly bullish for oilseed markets, traders said. The USDA lowered its 2008/09 and 2009/10 US soybean ending stocks estimates but both reductions were well within trade expectations.

The slightly bullish USDA report is expected to underpin Chicago soybeans at the North American open, which could encourage additional prices gains in canola, market watchers said.

Traders warned, however, that soybeans could eventually turn lower if ‘buy the rumour, sell the fact’ pressure develops. Those concerns were already beginning to weigh mildly on some canola contracts.

Also, outside markets had been bullish for canola prices but North American equities and crude oil futures were beginning to retreat from their earlier highs.

That said, poor growing conditions and concerns about 2009/10 Canadian canola production will underpin canola, brokers said. Frost damage is said to have affected canola fields in all three prairie provinces and crop emergence is behind normal for this time of year.

The softening Canadian dollar, the slow pace of farmer selling in Canada and commercial buying interest will help provide a floor for canola as well on Wednesday, traders said.

As of 9:10 CDT, 768 canola contracts had changed hands.

Meanwhile, no western barley futures had been traded as of 9:10, leaving values unchanged from Tuesday’s closing values.

Prices in Canadian dollars per metric ton at 9:10 CDT: