ICE Canola Up On Tightening Supply

Canola saw a very light trade with very small intermonth spreading. Activity was muted ahead of Wednesday’s USDA production and supply-demand reports with traders noting that the report has contained major surprises in the past.
They also noted that, with the resurvey of farmers’ plantings, it has a greater potential to be a major market force.

The total canola volume was estimated at 5,994 contracts, down from 7,257 contracts on Friday.

Canola was lower in the overnight market in the wake of steep declines in the Chicago Board of Trade soy complex. The e-cbot soybean market then pulled back up to small gains and that helped to bring canola back to small advances as well. Canola held on to small gains throughout the very choppy session despite moderate declines in CBOT soy complex futures, brokers said. Canola ended with modest gains.

Canola was supported mainly by the slow selling pace and a strong export program for September.
Sources are estimating Sept canola exports at 500,000 metric tons, up from about 350,000 tons in Aug.
Contributing to the firmness is the tight supply with the Canadian Grain Commission pegging visible stocks of canola on July 31st being held by commercials at just 656,700 tons, down from 977,100 tones at the same time last year.

The weak Canadian dollar and lingering concern about the canola crop being vulnerable to frost helped to underpin the market as well.

Weighing on the market was the steep slide in CBOT soy complex futures and ideas the crop has improved in the past week, which will be confirmed by this week’s provincial crop reports.

Weather forecasters are calling for a warm up to near ideal growing conditions for the crops in Manitoba and Saskatchewan. However, Alberta conditions are expected to be cool.

Routine exporter and crusher buying met speculative commission house selling and light commercial offerings.

Western barley was steady to higher in very small volumes. Activity was subdued by the fact that feed lot margins are poor which has sidelined their interest in barley, brokers said. Short covering boosted the Oct contract.

The total estimated barley volume was 5 contracts, down from 23 contracts on Friday.

Prices are in Canadian dollars per metric ton: