ICE Canola Supported By US Soy

Canola saw an active trade with intermonth spreading augmenting the total volume. Speculators were buyers of the spread while crushers were sellers.

The total canola volume was estimated at 16,496 contracts, up from Friday’s 15,575 contracts, including an estimated 11,928 contracts involved in the spread trade.

Canola was higher in the overnight trade as gains in Malaysian palm oil and e- cbot soybean futures supported the market. Canola turned narrowly mixed as the North American trading session got underway and the CBOT soy complex opened higher. Canola bounced to both sides throughout the session ending modestly higher.

Canola was supported by the firm tone in CBOT soy complex futures, routine export demand, improved crush margins and friendly technical signals, traders said. News that China would take more Canadian canola oil in 2010 was only mildly supportive as it was offset by the continued embargo against canola seed purchases by China.

Weighing on the market and leading to the choppy tone was the very strong Canadian dollar, increased farmer selling early in the session and continued bearishness from Thursday’s Statistics Canada estimate for canola production to hit 11.8 mln metric tons, brokers said. The farmer selling accounted for the small losses in the Jan contract.

Routine exporter buying was augmented by scale down speculative buying with the selling coming from increased hedge pressure from elevator companies and crusher selling.

Western barley ended narrowly mixed in light commercial activity. The lack of country movement gave some support, but demand was lackluster and that accounted for the mixed choppy tone, brokers said.

The total barley volume was estimated at 100 contracts, down from 281 contracts on Friday, including an estimated 34 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: