ICE Canola Up On Slow Selling, Crop Concerns

Canola saw an active trade with very little intermonth spreading in the volume.

The total canola volume was estimated at 9,831 contracts, up from Tuesday’s 6,708 contracts, including an estimated 502 contracts involved in the spread trade.

Canola was higher in the overnight trading session as the weak Canadian dollar and strong commercial demand lifted values. Canola held onto its gains as the North American trading session got underway and the Chicago Board of Trade soy complex posted losses, traders said. Canola ended with small gains.

Canola was supported by the lack of selling with farmer selling very light. Crushers in Alberta
have been offering basis levels of C$10 above futures to stimulate country movement, cash dealers confirmed. They also noted that exporters have been matching some of those basis levels.

The poor condition of the Alberta canola crop also gave support as Alberta Agriculture reported that 78% of the province’s canola crop was fair to poor while only 22% was rated good to excellent as of August 13th. Continued concerns about possible frost damage and the firm tone in crude oil also supported values.

Short covering was noted ahead of Friday’s Statistics Canada crop production report.

Weighing on the canola market was the strong Canadian dollar, bearish technical signals and the decline in the CBOT soy complex.

Exporter and crusher buying was augmented by some speculative short covering. The selling comprised of commercial and speculative offerings.

Western barley futures ended higher in light trade. The lack of country movement forced some small end user pricing to lift values, brokers said,.

The total barley volume was estimated at 25 contracts, down from 70 contracts on Tuesday.

Prices are in Canadian dollars per metric ton: