ICE Canola Up On US Soy Gains, China Talk

Canola saw a light trade with only small intermonth spreading.
As of 11:28 CDT, an estimated 4,535 contracts had traded. Activity was expected to be subdued with some evening up noted ahead of the Canadian long weekend which will see the ICE Canada market closed on Monday.

Canola rallied in the wake of the strong gains in the CBOT soy complex, said traders.
"You’ve got soyoil up almost 2 cents, that’s a big support for canola," said a trader. Overnight gains in international vegetable oils and oilseeds contributed to the advance as well. Ideas that canola was seriously oversold, after its recent decline to its lowest level of the year, also helped to boost values.

There is also talk in the trade that China has or is about to start booking canola for an active fall shipping program. "I think that they (China) may take as much this fall as last year," said a source.
The large purchase of US soybean overnight by China encouraged some of the expectation for the buying of canola.

The swift rally above the C$400 level in the Nov contract also was supportive as it triggered some speculative short covering.
However, commodity funds were not seen doing any major short covering and traders feel they will not cover their shorts until canola climbs above the C$420 level.

Also lifting the market was the continuing concerns about frost with temperatures dropping as low as 5 degrees Celsius in the Saskatoon area, which is prime canola growing land, said traders.

Selling was sluggish with farmer selling light.
"There’s a variety of selling coming from mainly commercial sources, but it is not heavy or aggressive", said a trader.
The firm Canadian dollar weighed on the market.

Exporter and crusher pricing gave support with some light commission house short covering evident in the trade. Commercials supplied the bulk of the selling.
Commodity funds were light traders on both sides of the market.

Western barley was mixed in light trade. The Oct contract was pressured down by thin liquidation selling.
The Nov contract rallied with the gains in CBOT corn. However, the advance was modest as end user demand was slow, brokers said.

The total barley volume at 11:27 CDT was estimated at 52 contracts.

Prices at 11:27 CDT in Canadian dollars per metric ton: