ICE Canola Rallies With US Soy, Slow Selling

Canola saw a very light trade with intermonth spreading enhancing the volume.

The total canola volume was estimated at 6,919 contracts, up from Friday’s 5,569 contracts, including an estimated 2,438 contracts involved in the spread trade.

Canola futures were higher in the overnight session reflecting the gains in international vegetable oil prices. Canola extended its gains as the North American trading session opened and the CBOT soy complex posted larger than expected advances. Canola ended with moderate gains.

Canola drew much of its support from the gains in CBOT soy complex futures and from the lack of farmer selling as the harvest in western Canada winds down. Cash market basis levels have started to firm in western Canada and that was supportive, cash dealers said.

Contributing to the advance were friendly technical signals and improved crush margins as the soaring soyoil market offset the negative impact of the strong Canadian dollar.

Weighing on the market was the uncertainty about canola exports to China and the strong Canadian dollar. News that more canola meal had been stopped at the US border because it contained salmonella had little market impact.

Export pricing, thought to be for sales to Mexico, was augmented by crusher buying.
Speculative buying was triggered by the upward surge in the US soy market, brokers said.

Western barley ended higher in moderate trade. The firm tone in CBOT corn supported barley values with steady farmer selling limiting the advance, brokers said.

The total barley volume was estimated at 220 contracts, up from 1 contract on Friday.

Prices are in Canadian dollars per metric ton: