ICE Canola Rebounds On Oversold Ideas

Canola saw a moderate trade with very little intermonth spread activity. Trade is subdued ahead of the Friday’s USDA supply-demand reports, said brokers with slow farmer selling also restricting participation.

The total canola volume was estimated at 5,835 contracts, down from 9,674 contracts on Wednesday, including an estimated 946 contracts involved in the spread trade.

Canola was higher in the overnight market, reflecting the firm tone in international vegetable oil prices and ideas that canola was oversold. Canola maintained its strength as the North American trading session opened and the Chicago Board of Trade soy complex rallied. Canola held onto its gains all session ending moderately higher.

Canola was boosted by ideas the market was oversold and due for a rebound and the firm tone in CBOT soy complex futures, traders said. The lack of elevator company hedging,
as they move any canola they are taking in from farmer’s directly against export sales bypassing the futures market, also gave support to canola, said brokers.

Rain benefitting the western Canadian crop also encouraged selling as did bearish technical signals, which limited the firmness. Harvesting of competing rapeseed crops in Europe and the Ukraine also weighed on prices. The stronger Canadian dollar was also a negative price feature, analysts said.

Exporter and crusher buying met commercial and speculative selling.
Commodity fund selling was evident in today’s trade, although brokers felt that funds are close to having completely liquidated their Nov long position.

Western barley futures ended steady to lower in light trade. The Oct contract continues to note liquidation of open interest.

The total barley volume was estimated at 124 contracts, down from 196 contracts on Wednesday.

Prices are in Canadian dollars per metric ton: