ICE Canola Turns Higher With CBOT Soy Complex

Canola futures had been lower in early choppy trade in response to the soft overnight tone in outside oilseed markets. Prices rallied, however, when the CBOT soy complex recovered on news that 110,000 metric tonnes of old crop US soybeans had been sold to China.

The news was also seen as supportive for canola as it gives weight to ideas that there is still some Chinese demand for North American oilseeds.

Commodity fund buying had been pushing up canola contracts as well although it seems to have paused, a trade source said. The technically-based buying was triggered when May CBOT soybeans pushed above the psychologically important US$10 a bushel mark.

Further buying could occur if canola contracts press to session highs again, the source said.

Steady farmer selling had been triggered when canola first moved higher but it has subsided, removing some upside resistance, brokers said.

Additional support for the market was tied to the rebound happening in crude oil futures and the gains in global equities, market watchers said.

Traders said some market participants would be hesitant to take on new market positions ahead of Thursday’s updated USDA supply/demand estimates, which will include soybean production forecasts for both Argentina and Brazil.

The Canadian dollar was little changed Wednesday morning and consequently was having little impact on the market.

Canola was seeing moderate trade volumes although outright interest accounted for only a small portion of the activity. As of 10:57 CDT, 9,022 canola contracts had changed hands and of that amount, 7,752 trades were spread-related.

Western barley futures were higher although there was only light activity in the market. Only 136 contracts had traded as of 10:57 CDT and 44 were tied to spreading.

Prices in Canadian dollars per metric ton at 10:57 CDT: