ICE canola settles at higher levels after USDA report

Alana Vannahme, Resource News International

Winnipeg, March 31 — Canola futures on the ICE Futures Canada platform were trading at higher levels as of 11:10 CDT on Tuesday.

The market rose after a U.S. Department of Agriculture planting report showed that U.S. farmers intend to plant fewer soybean acres than expected. Producers said they will plant 76.0 million soybean acres in 2009, a record amount and higher than last year but still three to four million acres less than the trade had forecast.

The CBOT soy complex saw strong advances due to the report and canola contracts followed suit, market watchers said. Both markets have settled at higher levels although minor profit-taking has slightly trimmed their post-report gains, traders said.

Adding to the bullish sentiment backing North American oilseed prices was news that Argentina’s Agricultural Secretariat estimated the size of its soybean crop between 37 and 39 million tonnes, below most trade estimates, brokers said. The USDA puts the crop at 43 million tonnes.

Gains in equity markets and routine exporter pricing were supportive price features as well for canola.

Crude oil futures were slightly lower and the Canadian dollar was firmer versus the US dollar but, according to traders, both were having a minor limiting effect on canola prices at best.

As of 11:10 CDT, 6,498 canola contracts had been traded, 2,858 of which were spread-related.

There was very little interest in the western barley market on Tuesday. There were 28 contracts traded at 11:10 CDT with all of the activity tied to spreading.

Prices in Canadian dollars per metric ton at 11:10 CDT:

          Price    Change
Canola
     May     419.20    up 5.50
     Jul     423.50    up 5.00
     Nov     429.40    up 5.00
 
Western Barley
     May     144.00    unch
     Jul     151.00    unch