ICE Canola Underpinned By e-CBOT Soybeans

Light local and commercial buying was also encouraged by expectations that Chicago soybean futures will open 10 to 12 US cents a bushel higher when North American trading gets underway.

In early activity, outside markets were mildly supportive for canola, with stock markets posting small advances and crude oil futures working their way higher as well.

Concerns about weather problems in western Canada will add to canola’s underlying support. Depending on the area, the trade is nervous about dryness, excess moisture and cold temperatures negatively affecting this year’s canola crop.

Slow farmer selling, as a result of the weather scares, is also underpinning canola prices. Market watchers said many producers have locked up their remaining canola until growing conditions begin to improve and they are more comfortable about their 2009/10 production level will be.

However, the Canadian dollar was stronger as well and could discourage buying interest in the market, traders said. A absence of fresh export business and declining crush margins will also be undermining price influences on Thursday, they said.

Volumes in canola early Thursday were heavier than normal, with 2,198 contracts having changed hands as of 10:11 am EDT. Of that amount, a portion was tied to spreading.

Meanwhile, western barley futures were moderately lower in light trade, with the bulk of the activity the result of intermonth spreading.

Prices in Canadian dollars per metric ton at 10:11 am EDT: