ICE Canola Up On Weak Loonie

Canola saw an active trade with much of the volume comprised of intermonth spreading. The Nov/Jan spread accounted for the majority of the spread activity, although there was also good trade in the Jan/Mar spread.

The total canola volume was estimated at 19,509 contracts, up from Tuesday’s 13,678 contracts.

Canola was lower in the overnight market, prompted by weakness in the international vegetable oil prices. Canola continued to see small losses as the North American trading session got underway and the Chicago Board of Trade soy complex opened lower. Canola turned higher about midmorning and ended higher despite weakness in the US soy complex.

Canola was supported by the sharp declines in the Canadian dollar and the slow pace to farmer selling. Further weather related delays in the harvest, with 20% of the canola crop unharvested, contributed to the gains. Improved crush margins and friendly technical signals also encouraged the firm tone.

The advance was slowed by the declines in CBOT soy complex and the uncertainty surrounding exports to China as China is demanding that all canola shipped after Nov 15th be blackleg free.
Blackleg is a disease of canola and the Canadian variant is felt to be more virulent than the type found in China.

Crushers were strong buyers with routine exporter pricing noted.
Speculative buying was evident with short covering triggered by today’s advances, analysts said. The selling came from commercials and grain companies.

Western barley ended higher in light trade. The market ignored weakness in the CBOT corn market and reacted to increased demand from elevator companies and feed lots, brokers said. Traders estimate that 8% of the western Canadian barley crop has not been harvested due to inclement weather conditions.

The total barley volume was estimated at 338 contracts, up from 152 contracts on Tuesday.

Prices are in Canadian dollars per metric ton: