ICE Canola Up On Oversold Ideas

Canola saw a light to moderate trade with only light intermonth spreading.

The total canola volume was estimated at 9,591 contracts, down from Tuesday’s 12,682 contracts, including an estimated 2,082 contracts involved in the spread trade.

Canola was lower in the overnight market, reflecting weakness in international vegetable oil markets. Canola values firmed backed toward unchanged as the North American trading session got underway and the Chicago Board of Trade soybean futures opened with only modest declines. As the session progressed, canola moved modestly higher with futures ending with small gains.

Canola was supported by ideas that the market was oversold after dropping C$34/metric ton in the past week.
Also contributing some support was the firming action in Chicago Board Of
Trade soybean futures, particularly in the last 15 minutes of the session.

Farmer selling was very light as producers have backed away from the market as farm gate bids have dropped below C$8.00/bu in many parts of western Canada.
That also helped the market to rebound.

However, limiting the ability of the market to rally was the firm Canadian dollar and bearish technical signals as traders are talking about testing lows at the C$380/ton level in the Mar contract. The absence of fresh demand in the small volumes also restrained the gains.

The uncertainly injected into the market by Tuesday’s USDA reports has sidelined many traders and that is accounting for the small volumes.

Routine exporter pricing and light crusher buying gave support with the selling coming mainly from commercials although there was some light speculative selling evident.

Western barley was unchanged and only lightly traded amid a lack of interest. Traders noted that open interest continues to fall in barley and the contract is likely to "cease" as a functioning contract.

Prices are in Canadian dollars per metric ton: