ICE Canola Sees Small Gains On Oversold Ideas

Overnight gains in the e-CBOT soy complex, Malaysian palm oil, and the European rapeseed market helped to generate some minor strength for canola, brokers said.

Light exporter pricing of old business was also seen as helpful for canola values.

"I would classify the price action in canola as more of a temporary stabilization rather than an upward bounce," a market analyst said.

He said the upside in canola continues to be restrained by the fact the weather for the soybean crop in the US continues to be favourable.

The ongoing harvest of the Ukraine rapeseed crop was also viewed as an undermining price influence as it was putting fresh oilseed supplies onto the world market, the analyst said. Europe’s rapeseed crop was also looking good and was also about to be harvested, which will only add to the global oilseed supply availability.

Sentiment that the canola crop in western Canada has benefited somewhat from significant precipitation over the past few days also was preventing canola futures from posting any major upward move, traders said.

Strength in the Canadian dollar was limiting the upside in canola as was reduced domestic processor demand amid declining crush margins.

Traders were also taking issue with producer offerings, which have been reported as slow.

"Looking at the weekly numbers from the Canadian Grain Commission, I would disagree with the statement that deliveries have been on the light side," a trader said.

He said the CGC figures for the week ended July 6, showed that farmer deliveries in the latest period were 211,600 metric tons, which was down only slightly from the 224,700 the previous week. Farmer deliveries on a year to date basis during 2008/09 (Aug/Jul) were 10.725 million tons, compared with 8.629 million at the same time during the 2007/08 season.

There were an estimated 2,846 canola contracts traded at 10:44 CDT. Of the contracts traded, 442 were spread related.

There were no western barley futures traded as of 10:44 CDT.

Prices in Canadian dollars per metric ton at 10:44 am CDT: