ICE Canola Up On Weak Loonie,China Rumours

Canola saw a moderate trade with intermonth spreading enhancing the volume of activity.
Month end positioning was also noted.

The total canola volume was estimated at 12,918 contracts, up from Thursday’s 10,407 contracts.

Canola was lower in the overnight session reflecting weakness in international oilseed markets and month end positioning. Canola continued to see losses as the North American trading session began and the Chicago Board of Trade soy complex opened lower. About mid-morning the canola market turned solidly higher and the market ended with gains.

Canola drew support from the steep slide down in the Canadian dollar and the lack of farmer selling. The sluggish canola harvest, with 30% of the Saskatchewan crop still unharvested, also encouraged gains.

Prompting the midmorning rally in canola were rumors that talks between China and Canada over canola exports were progressing well.

"Exporters are pretty optimistic that this problem will be resolved and that exports will continue," said a trader.
Canola exports to China have been halted by China’s insistence that Canadian canola can not contain the disease black leg.

The ability of the Jan contract to rally above the significant resistance at C$400 triggered some panic short covering, brokers said.

Capping the gains was the steep slide down in CBOT soy complex futures, particularly soyoil, said analysts.

Small crusher buying was noted with steady exporter pricing evident. Speculative short covering was also evident. The selling was mainly commercial.

Western barley ended mixed in light trade. The Nov contract was boosted by short covering ahead of Nov becoming the cash month. The rest of the market was lower on sluggish demand and the steep slide in Chicago corn prices, brokers said.

The total barley volume was estimated at 149 contracts, up from 31 contracts traded on Thursday.

Prices are in Canadian dollars per metric ton: