ICE Canola Up On Monday’s CBOT Rally

Canola saw an active trade with intermonth spreading augmenting activity.

The total canola volume was estimated at 14,995 contracts, up from Friday’s 5,985 contracts, including an estimated 8,414 contracts involved in the spread trade.

Canola was higher in the overnight market as canola played "catch-up" with Monday’s big advance in CBOT soy complex futures. Canola extended its gains as the North American trading session got underway, despite a small drop Tuesday in CBOT soy complex futures, traders said. Canola ended the session with strong gains.

Canola was supported by the Monday US market rally and by export talk. Indications that China would do another around of buying this week after doing some buying last week helped to lift the market. In addition Japan is expected to book a significant amount of canola this week.

Contributing to the firm tone are ideas that canola yields are well below normal and that cold conditions continue to threaten the crop. Temperatures overnight in Regina Saskatchewan dropped as low as 4 degrees Celsius with Environment Canada forecasting temperatures this week 5-10 degrees below normal for much of the prairies.

Speculative buying was also evident as technical signals turned friendly triggering commodity fund short covering, brokers s said.

Weighing on the market was the firm Canadian dollar.

Crushers and exporters were noted buying with some Japanese pricing also evident.
Speculative short covering appeared in the trade with commodity funds steady buyers, starting in the overnight session, brokers s said. The selling came from commission house profit taking, elevator company selling on a scale up, commercial offerings and European hedge selling.

Western barley ended a bit lower in light trade. Prices initially rallied on Monday’s big gains in CBOT corn. However the gains in the Canadian dollar, which makes US feed imports cheaper, weighed on the market, brokers said.

The total barley volume was estimated at 89 contracts, down from 152 contracts on Friday including an estimated 48 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: