ICE Canola Up On US Soy, Weather

Canola saw a very heavy trade with much of the volume continuing to be comprised of intermonth spreading as commercials and commodity funds continued to roll July futures into the Nov contract.

The total canola volume was estimated at 25,627 contracts, up from 17,239 contracts on Wednesday, including an estimated 20,420 contracts involved in the spread activity.

Canola was higher in the overnight market in response to strength in international vegetable oil prices and gains in crude oil. Canola extended its gains as the North American trading session began and the US soy complex rallied. Canola climbed during the session in reaction to the firming in CBOT soybean futures, ending sharply higher.

Canola drew support from the rally in CBOT soy complex futures with the market also boosted by weather concerns. Forecasts call for cold temperatures across western Canada this weekend and that prompted buying as the market built in a weather premium. Gains in crude oil and slow farmer selling also supported values.

Farmer selling in the futures market was slow, noted traders. However, cash dealers stated that grain exporters are asking producers with contracts for delivery of canola in July to move those deliveries up to June because of a large number of vessels arriving for canola.
The Canadian Ports Clearance Association reported this morning that over 480,000 metric tons of canola will be needed by the middle of this month for vessels scheduled to arrive. Cash dealers noted that those farmer deliveries are going straight against export sales and are not being priced in the market, accounting for the low level of hedging in futures.

Weighing on the market was the strong Canadian dollar and news that China was out of the market for fresh sales of canola, traders said. Some traders also expressed nervousness about China’s cancellations of US soybean sales and the possibility they could cancel canola as well.

Routine exporter and crusher pricing met mainly commercial selling in the outright trade.

Western barley higher in very light trade. Commercials were the only participants with many of them sidelined waiting for the exchange to unveil its revised barley contract.
The lack of farmer selling supported values, brokers said.

The total barley volume was estimated at 74 contracts, down from Wednesday’s 129 contracts, including an estimated 10 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: