ICE Canola Strengthens With Fund Buying

Advances in the CBOT soy complex were providing some spillover support to the canola market, helping encourage the buying interest, according to a Winnipeg-based trader. He said much of the activity was tied to large fund traders who were on both sides of the market taking profits on one hand, but also adding to their long positions as prices continue to hit new highs.

Strong crush margins contributed to the gains in canola, as the domestic processors continue to see good profits.

A lack of farmer selling was also supportive, with most farmers content to sit on the sidelines until the New Year before making more sales, according to market participants.

Activity was somewhat cautious in canola, as traders were bracing themselves for some potential volatility ahead of the Christmas holiday.

On Wednesday, canola held relatively steady for most of the session before climbing sharply in the final minutes of trade as the funds increased their purchases. With the canola market about to close for a four day weekend, the funds could easily attempt to take values higher again, or just as easily turn around and book more profits and drop values at the close, said a trader.

ICE Futures Canada will be closed Friday, December 24, and Monday, December 27. US grain and oilseed markets will also be closed Friday, but will reopen on Monday.

At 10:50 CST, about 12,000 canola contracts had changed hands. Spreading was a feature accounting for over 7,000 of the contracts traded.

Western barley futures were untraded and unchanged at midsession.

Prices in Canadian dollars per metric ton at 10:50 CST: