ICE Canola Up On Sluggish Farmer Selling

Canola saw a very heavy trade with the bulk of the activity being intermonth spreading as participants rolled their Jan contracts into the Mar contract ahead of month end.

The total canola volumes were estimated at 16,128 contracts, up from Tuesday’s 10,055 contracts, including an estimated 10,426 contracts involved in the spread trade.

Canola was higher in the overnight market, prompted by gains international vegetable oil prices. Canola held onto to gains as the North American trading session got underway and the CBOT soy complex opened higher. However, canola gains faded as the US soy complex gave up its advances and canola ended modestly higher.

Canola drew much of its support from the firm tone
in the US soyoil market
with the sluggish farmer selling giving good support as well. Cash dealers have indicated that farmers have become increasingly bullish and are looking for the cash market to climb to the C$9.00/bu level before selling.

Also contributing support were friendly technical signals and a weak Canadian dollar, analysts said. Routine export demand from Mexico and Japan also underpinned values.

Capping the gains were ideas that canola was becoming overbought with the continued uncertainty about exports sales to China also weighing on the market. The gyrations and eventual losses in the CBOT soybean market also weighed on prices.

Exporter and crusher buying were augmented by speculative buying with much of that buying felt to be commodity fund interest, particularly when the Jan contract penetrated resistance at the $404-$405 level. The selling was mainly commercial.

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

Prices are in Canadian dollars per metric ton: