ICE Canola Up On Vegoil Gains

Canola saw a very light trade with an estimated 276 contracts traded as of 08:42 CDT. Activity continues to be subdued ahead of Wednesday’s US Department of Agriculture production and supply-demand reports.

Canola traded below Monday’s close during the overnight session but eventually rallied as international vegetable oil markets firmed. Malaysian palm oil was up 2.8% overnight. Canola is expected to hold its gains as the North American trading session gets underway and the Chicago Board of Trade soy bean market is forecast to rally.

Canola will continue to draw support from tight supplies with farmer selling continuing to be slow.
A strong export lineup through the end of Sept is also positive. The weak Canadian dollar will also contribute to the advance with little other fresh news noted in the market.

Weather concerns continue with frost still expected to be a problem for the canola crop which is 2 to 4 weeks late.
Weather forecasts call for lows in the Edmonton area Thursday night to drop to the 4 degree Celsius mark with single digit lows expected across the entire province of Alberta this week.

Limiting the upside in the market is improved crops and better weather in Manitoba and Saskatchewan this week. Lower crude oil values will also weigh on canola, traders said.

Commercials have dominated the early trade.

Western barley is untraded and unchanged with the Oct contract expected to continue to see short covering on the need to reduce open interest in the contract, brokers said.

Prices at 08:41 CDT in Canadian dollars per metric ton: