ICE Canola Up On Late Harvest, US Soy

Canola saw a moderate trade with light intermonth spreading evident.

The total canola volume was estimated at 12,105 contracts, up from Monday’s 10,937 contracts.

Canola saw small losses in the overnight market, reflecting the weakness in international vegetable oil markets. Canola continued to see losses as the North American trading session got underway and the CBOT soy complex opened modestly lower. Canola then started to rally in the wake of gains in the US market with canola finishing the session with small advances.

Canola was supported by the strong rally in CBOT soy complex futures.
Also giving some support was the crop uncertainty as the harvest has resumed in much of western Canada with an estimated 20% of the canola crop unharvested.
"Traders are trying to get a handle on how much of the canola crop will remain uncut over the winter," said a trader.

Friendly technical signals also gave some support as Monday’s performance of the Jan contract was felt to be a positive indicator. However, the technically based traders noted that the Jan contract will have to penetrate C$410 to become very bullish.

Contributing to the gains was talk that exports were being booked although the buying was not coming from Japan or China.
It was thought that either Pakistan or Mexico were in the market.

Capping the gains and creating a choppiness in the canola trade was the lingering uncertainty about exports to China as they maintain that they will not take any canola from Canada after Nov 15th unless it is blackleg free. Most traders feel that China will back away from that position once they have eaten through the sizeable canola and rapeseed stocks they are currently holding.

The firm Canadian dollar and unaggresive nature of demand also contributed to selling pressure over the market, analysts said.

Crushers and exporter buying was augmented by some commodity fund buying in the Jan contract. The selling comprised of commercial and commission house offerings, traders said.

Western barley was lightly trade with prices mixed.
There was little interest in the market. "Everybody’s standing back and watching to see how high (CBOT) corn goes before jumping into barley", said a trader.

The total barley volume was estimated at 65 contracts, up from 49 contracts on Monday.

Prices are in Canadian dollars per metric ton: