ICE Canola Soars On Weather Problems

Canola saw an active trade with intermonth spreading by commodity funds and commercials accounting for much of the volume.

The total canola volume was estimated at 14,796 contracts, down from Friday’s 15,974 contracts.

Canola was moderately higher in the overnight market as the firmness in crude oil and international vegetable oils spilled in to boost canola prices in very small volumes. Canola expanded its gains as the North American trading session got underway and the Chicago Board of Trade soy complex posted a strong opening rally. Canola extended its advance about midday as weather forecasts indicate developing weather problems for the crop.

Canola drew early support from the gains in CBOT soy complex values and the rally in crude oil.
Developing weather problems sent canola to its highs as record dryness in parts of western Canada and forecasts for frost in Saskatchewan and Alberta this week prompted buying, traders said. Contributing to the firmness was the lack of farmer selling and the solid gains in the US soy complex.

Strong speculative commodity fund buying appeared in the Nov contract as the rally triggered technical buy points, analysts said.

Weighing on the market was the lack of fresh export demand, a slowing crush pace and the firm Canadian dollar.

Routine exporter and crusher buying was augmented by commodity fund buying. Traders estimated fund buying at 1,500 – 2,000 Nov contracts. The selling was mainly commercial with only light elevator company hedge selling noted. Exporter liquidation selling was evident.

Western barley ended higher in moderate commercial trade with intermonth spreading enhancing the volumes. The firm tone in CBOT corn and the weather threat to the barley crop boosted prices, brokers said. End user demand met commercial liquidation selling.

The total barley volume was estimated at 1,534 contracts, up from 1,123 contracts on Friday.

Prices are in Canadian dollars per metric ton: