ICE Canola Up On Sluggish Selling

Canola activity was light to moderate with intermonth spreading augmenting the volumes. Trade was subdued by the abbreviated Chicago Board of Trade session that saw the CBOT close at noon.

The total canola volume was estimated at 8,867 contracts, up from 6,765 contracts on Thursday, including an estimated 2,736 contracts involved in the spread trade.

Canola was lower in the overnight session on the weakness in international markets prompted by the credit problems for Dubai World. Canola maintained small losses as the North American trading session got underway and the CBOT soy complex opened lower. Canola moved higher early in the session on the weakness in the Canadian dollar.

Canola was supported by the lack of farmer selling and the weak tone in Canadian dollar.
Also contributing to the gains was an improved crush pace and friendly technical signals as the Jan contract challenged resistance at the $410-$411 level once again.

However, capping the gains was the weak tone in CBOT soy complex futures and the continued uncertainty about exports to China, analysts said. Losses in outside markets, reflecting the credit problems in Dubai, also maintained selling pressure on the market.

Canola saw solid gains through most of the session but turned choppy after the CBOT market closed its abbreviated session. Traders noted that buyers seemed to back away allowing fairly light selling pressure to trim canola back from its gains.
"Buyers just backed away after Chicago closed…we barely traded 500 (canola) contracts in the last hour," said a trader.

Crushers and exporters were steady buyers with light commodity fund buying noted. The selling was mainly commercial with elevator company selling noted. Cash dealers noted that there was some pricing of delivery contracts ongoing.

Western barley ended a bit higher in light trade. The lack of country movement and recent strength in CBOT corn accounted for the firmness in the barley market, brokers said. The unexpected increase in the Canadian Wheat Board barley Pool Return Outlook price also gave some support.

The total barley volume was estimated at 14 contracts, down from Thursday’s 25 contracts.

Prices are in Canadian dollars per metric ton: