ICE Canola Up On US Soy Gains, Snow

Canola saw a moderate trade with intermonth spreading enhancing activity as commodity funds continued to roll Nov futures into the Jan contract.

The total canola volume was estimated at 13,379 contracts, up from Thursday’s 10,448 contracts, including an estimated 6,892 contracts involved in the spread trade.

Canola was little changed in a tight trading range in the overnight market, supported by the gains in international vegetable oil prices. The market briefly declined on what was construed as a bearish US Department of Agriculture production and supply-demand report. The market them posted strong gains as the North American trading session got underway and the Chicago Board of Trade soybean market unexpectedly rallied.

Canola drew support from the upward surge in CBOT soy complex futures. The market was also boosted by snow in Alberta and Saskatchewan halting harvesting. Saskatchewan still has about 35% of the crop to combine with some prime canola areas only at 50% completed, said traders.

Canola drew added support from slower farmer selling and friendly technical signals which prompted some speculative short covering. Technically based traders say the Nov canola contract could challenge resistance next week at $391.50 if snow continues to hamper the harvest. Traders also expect to see China back in the market next week.

Limiting the advance in the market was the very strong Canadian dollar as analysts feel the Canadian dollar is will reach parity with the US currency shortly. Slower crusher demand, as the crush pace has dropped off to 56.9% of capacity from an average of
71.5%, also limited the gains, brokers said.

Exporter buying was augmented by light crusher interest and commission house short covering. The selling was mainly commercial with elevator company selling only steady.

Western barley posted gains in light trade. The lack of farmer selling supported the market although the unaggresive nature of end user buying left the gains modest, brokers said.

The total barley volume was estimated at 31 contracts, down from 162 contracts on Thursday.

Prices are in Canadian dollars per metric ton: