ICE Canola Posts Small Gains In Overnight Trade

Values were underpinned by overnight advances in outside markets, including e-CBOT soybeans, European Matif rapeseed, global equities and crude oil futures, market watchers said.

Light buying in canola was also prompted by slightly higher opening calls for CBOT soybeans at the start of North American trade in Chicago.

Good buying interest is expected again Thursday from domestic processors, who are enjoying strong crush margins, and commercials looking to secure adequate canola supplies before farmer’s are preoccupied with spring seeding.

North American oilseed markets will have underlying support as well from news that the Buenos Aires Grain Exchange lowered its Argentine soybean crop estimate to 37 million metric tonnes from 39.4 million, market watchers said.

However, the Canadian dollar, which has recently posted significant gains, is trading at a slightly firmer level versus the US dollar. Further strength in the currency may limit canola’s upside potential by discouraging buying interest.

Also, while canola is still supported technically, prices are nearing resistance levels which could trigger speculative selling, traders said.

Ideas that CBOT soybeans’ recent run higher has been overdone and is due for a correction may also weigh on values, especially if outside markets retreat, brokers said.

There were 2,052 canola contracts traded as of 9:03 CDT.

Meanwhile, there was no activity in the western barley market so far on Thursday, with contracts untraded and unchanged as of 9:03 CDT.