ICE Canola Up With Late US Soy Rally

Canola saw a light to moderate trade with Mar/May spreading enhancing the volumes.
Crushers were buying the spread.

The total canola volume was estimated at 12,133 contracts, up from 9,820 contracts on Monday, including an estimated 5,538 contracts involved in the spread trade.

Canola was higher for most of the overnight session, prompted by firmness in international vegetable oil markets. Canola turned lower as the North American trading session got underway and the CBOT soybean market quickly turned lower after small initial gains, traders said. Canola ended the session with small gains in the actively traded contracts following a very choppy session.

Canola was mainly pressured down during the session by the weakness in CBOT soy complex futures with the continued strengthening of the Canadian dollar adding to the selling pressure. Farmer selling increased and that put some downward pressure on values as well.

Keeping the losses small was steady demand as shippers confirmed that export demand off the west coast remains brisk despite China being out of the market. Exporters have estimated that at least 400,000 tons of canola will ship off the west coast by the end of January.

Domestic demand was also supportive as the cumulative crush rate is approximately 100,000 metric tons behind last year’s pace. However, traders noted that this has not changed in months. Friendly technical signals also gave some support in helping to keep the declines modest.

When CBOT soybeans rallied modestly at the close it pulled canola higher with it.

Japanese pricing was noted with other routine exporter buying also evident in the trade.
Crushers were steady buyers throughout the day.
Early commodity fund buying also appeared.
Offerings were mainly from commercials with elevator company selling appearing during the session.
Cash dealers indicated that farmers are making cash deliveries in order to pay off January bills. As the US soybean market weakened speculative selling also appeared.

Western barley was untraded and unchanged.

Prices are in Canadian dollars per metric ton: