ICE Canola Up With US Soy

Canola saw a very light trade with intermonth spreading enhancing volumes. The low level of activity was felt to be prompted by the uncertainty about crop production due to weather problems.

The total canola volume was estimated at 5,812 contracts, down from 9,905 contracts on Monday, including an estimated 3,278 contracts involved in the spread trade.

Canola was narrowly mixed in the overnight trade reflecting thin volumes and uncertainly ahead of Tuesday morning’s Statistics Canada acreage report. Canola rallied as the North American trading session got underway and the CBOT soy complex advanced. Canola was firm throughout the session led by gains in the old crop as future prices ended higher.

Canola drew support from the gains in the US soy complex, the weakness in the Canadian dollar and the lack of farmer selling. The strong export lineup for canola is further supporting prices as was a report from China that they will be importing 135,000 metric tons of canola in July.

Tuesday morning’s Statistics Canada acreage report was friendly as it reduced canola area to 15.82 mln acres from 16.15 mln. However, traders largely discounted it as they expect that planting delays and re-seeding due to weather has reduced canola area even further.

Talk that the recent rain in the dry areas of Saskatchewan and Alberta was too late for many of the crops also gave some support to the market.

Capping the advance was a firm tone in the Canadian dollar, the lack of fresh export demand, as buyers take to the sidelines to assess the canola crop, and favorable growing conditions on the eastern Canadian prairies, analysts said.

Commercials dominated the small routine trade with exporter and crusher pricing meeting commercial selling.

Western barley ended mixed in light trade. The old barley contracts were dominated by light liquidation which accounted for the declines, The newly revised barley contracts, which are deliverable in southern Alberta, Canada’s main cattle production area, saw increased trade as end user demand met commercial selling, brokers said.

The total barley volume was estimated at 119 contracts, up from Monday’s 42 contracts, including an estimated 2 contracts involved in the spread trade.
The newly revised barley contracts traded 110 contracts, up from just 5 contracts on Monday.

Prices are in Canadian dollars per metric ton: