ICE Canola Posts Small Gains, Underpinned By USDA Report

Buying ahead of this mornings USDA’s supply/demand update had supported overnight advances in canola prices, as had strength in global vegetable oil markets, brokers said.

E-CBOT soybeans, Malaysian palm oil and European rapeseed values all firmed in overnight trade.

Once the USDA report had been released, the old crop soybean supply estimate continued to encourage light demand in canola, traders said. The report pegged 2008/09 US soybean carry-out at 130 million bushels, which was in line with trade expectations for tight old crop supplies.

Advances in crude oil futures and stock markets early Tuesday are supportive for canola. Below average US soybean planting progress, as shown in Monday’s US weekly crop progress report, and the small size of the Argentine soybean crop will also provide a floor for North American oilseed prices.

The flow of speculative money into grain and oilseed markets Tuesday will also lift values, market watchers said.

Chicago soybeans are called 10 to 20 US cents higher for the start of North American trade, which could extend canola’s early gains.

However, market participants warned of the possibility of selling developing later in canola. Minor profit-taking and ‘buy- the-rumour, sell-the-fact’ selling could pressure canola prices lower, they said.

Also, the Canadian dollar was stronger again Tuesday versus the US dollar, which could temper fresh demand for canola, they said.

As of 9:05 CDT, 2,191 canola contracts had changed hands.

Meanwhile, western barley futures were unchanged and untraded as of 9:05 CDT.

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