ICE Canola Up On Export Talk

Canola trade was active with intermonth spreading accounting for a significant portion of the volume.
Positioning was noted ahead of
Friday’s Statistics Canada grain stocks report.

The total canola volume was estimated at 17,183contracts, down from 20,959 contracts on Wednesday.

Canola was higher in the overnight session as gains in crude oil and higher international vegetable oil prices gave support. Canola held onto its gains as the North American trading session got underway and the CBOT soy complex initially rallied. However, US soy futures quickly turned lower after their opening, but the canola market ignored them and moved to its highest level in 8 months. Canola ended the day with only modest gains.

Canola was supported by talk of more export activity.
Pakistan and China were felt to be seeking more canola, traders said. Profitable crush margins were also supportive as were friendly technical signals.
A slower pace to farmer selling and a weak Canadian dollar contributed to the gains as well and canola was able to hold onto small advances in the face of the weakness in the CBOT soy complex.

Weighing on the market was light country pricing with farmers concentrating on planting.
Ideas that canola was becoming overvalued prompted some selling as did weakness in crude oil.

Crushers were strong buyers with exporter buying noted as well.
Commodity fund buying was evident with traders estimating their buying at 500 to 1,000 July contracts.

Commercials were the main sellers with light elevator company selling noted. Exporters were sellers today with commission house profit taking also evident.

Traders were looking to Friday’s StatsCan report to answer questions about the level of canola supplies on farm. Much of the grain trade feels the farm canola stocks are high.

Western barley ended mainly higher in light commercial trade. Much of the activity was intermonth spreading as traders rolled their July futures into the Oct contract. The lack of farmer selling boosted the market in the very thin volumes.

The total barley volume was estimated at 92 contracts, up from 15 contracts on Wednesday.

Prices are in Canadian dollars per metric ton: