ICE Canola Up On Friendly Charts

Canola saw a heavy trade with intermonth spreading by index funds accounting for much of the day’s volume. Positioning was noted ahead of Thursday’s Statistics Canada crop production report.

The total canola volume was estimated at 24,670 contracts, down from Monday’s 17,174 contracts.

Canola was narrowly mixed in the overnight trade as the firm tone in international vegetable oil markets was offset by the very strong Canadian dollar. Canola firmed up as the North American trading session got underway and the CBOT soy complex opened higher. Canola ended the session with moderate gains.

Canola was supported by the firm tone in CBOT soyoil futures and a slowing pace to farmer selling, analysts said. Friendly technical signals also encouraged gains as the Jan contract broke through resistance at C$410-$412 moving above the 100 day moving average. Routine export pricing contributed to the gains. Crush margins showed improvement and that stimulated crusher demand, said traders.

Weighing on the market was the very strong Canadian dollar and lingering uncertainty about canola export sales to China. The labour strike at CN Rail was also bearish as traders noted it could take the government as much as 2 months to legislate an end to the strike.

Thursday’s StatsCan crop report is expected to show a larger canola crop at about 11 mln metric tons, compared with the last report’s 10.3 mln tons.

Exporter and crusher pricing was augmented by speculative interest.
Commodity fund buying was noted while commission house buying was triggered when the Jan contract penetrated resistance, brokers said.
Commercials provided the bulk of the selling with elevator company selling steady.

Western barley was untraded and unchanged amid a total lack of interest.

Prices are in Canadian dollars per metric ton: