ICE Canola Up On US Soy, End Of Harvest

Canola saw a moderate trade with very little intermonth spreading evident.

The total canola volumes were estimated at 9,886 contracts, up from 6,986 contracts on Tuesday, including an estimated 802 contracts involved in the spread trade.

Canola was lower in the overnight trade on reports that China’s demand for Canadian canola to be blackleg free could cut exports by 70%.
Weakness in overnight soybean markets contributed to the price slide. Canola turned higher shortly after the opening of North American trade as the US soy complex market rallied. Canola ended with gains.

Canola rallied on the firm tone in the US soy complex. The weakness in the Canadian dollar and slower farmer selling, as the western Canadian harvest is virtually finished, contributed to the gains, traders said. Friendlier technical signals also helped to boost values.

Weighing on the market was a sluggish pace to export demand and the losses in crude oil. The unresolved situation surrounding Canadian canola exports to China had only minor bearish impact on the trade. "You would think that the China (canola export) situation which could cost us (Canada) 2 mln tonnes of exports would have a greater negative influence," said one trader.

China stated that canola imports from Canada will have to be blackleg free. However, analysts are noting an optimism amongst grain trade sources that the situation will be successfully resolved and exports resumed during the visit to China by Canada’s Prime Minister Stephen Harper at the beginning of December.

Routine exporter and crusher buying was augmented by commodity fund short covering.
The selling came mainly from commercials with steady but lighter farmer selling noted.

Western barley ended a bit higher in light trade. The lack of farmer selling in the thin volumes accounted for the gains, brokers said.

The total barley volume was estimated at 45 contracts, up from 2 contracts on Tuesday.

Prices are in Canadian dollars per metric ton: