ICE Canola Up On Weather Concerns

Canola saw a light trade with intermonth spreading augmenting activity.

The total canola volume was estimated at 7,760 contracts, down from Thursday’s 10,916 contracts, including an estimated 3,264 contracts involved in the spread trade.

Canola was modestly higher in the overnight session as slow farmer selling and dryness in western Canada supported values.
Canola continued to see small gains at the North American trading session began and the Chicago Board of Trade soybean market rallied. However, the US markets quickly turned lower and canola maintained its gains,
and extended them, closing with moderate advances as the old crop saw the best gains.

Canola was supported by the lack of farmer selling as demand remains high and exporters are trying to cover their needs, analysts said. A strong export line-up through July has prompted a firm tone in the cash market with cash bids rising to $12 above futures.
The lateness of the crop and reluctant farmer pricing in the new crop have supported the new crop prices as reasonably strong fresh new crop demand is noted for the Sept-Nov period. The new crop demand has pulled cash market basis levels to even with futures in Alberta and to a $3.00 discount in many points in Western Canada.

Farmer selling has been slowed by the crop problems as overnight showers were limited to just 30% of the dry area.
The seven day weather outlook calls for scattered showers in the area and no steady rain.
Traders indicate that, while the crop is not decimated yet, it can not take another 2 weeks without rain.

Limiting the gains in canola are a sluggish pace to fresh bookings and the steep losses in the normally dominant CBOT soy complex, traders said.

Routine exporter and crusher buying met mainly commercial selling.

Western barley ended unchanged amid a lack of interest. The low level of interest reflects the fact that the newly revised barley contract will appear in the market on June 22.

The total barley volume was estimated at 1 contracts, down from 3 contracts on Thursday.

Prices are in Canadian dollars per metric ton: