ICE Canola Up With US Soybeans

Canola saw an active trade with intermonth spreading accounting for much of the activity.
Commercials continue to pare down their July position.
The panic July/Nov spread activity that dominated the trade on Tuesday was absent today as the market realigned itself.

The total canola volume was estimated at 17,539 contracts, up from Tuesday’s 13,882 contracts, including an estimated 11,004 contracts involved in the spread trade.

Canola was narrowly mixed in the overnight trade as it tried to consolidate from recent losses, traders said. Canola maintained a narrowly mixed tone as the North American trading session got underway in step with a choppy opening trade in CBOT soybeans. As the US soy market firmed up, canola turned higher, although gains were much more muted than the US market. Canola ended mainly a bit higher with only the July contract
lower as the market readjusted the July/Nov spread that got out of alignment on Tuesday.

Canola was mainly supported by the firm tone in the US soybean market and by ideas the market was oversold and due for an upward bounce after the recent slide to two week lows. Continued production uncertainty about the canola crop due to weather and the strong export lineup into July gave support, as well.

Capping the market and keep the gains modest was improving weather as near ideal conditions are forecast for the soaked eastern prairies while the dry areas of the western prairies are forecast to have rain. The early weakness in crude oil and CBOT soyoil also weighed on prices as did a sluggish fresh export pace. Talk that China had canceled 2 cargoes of canola was met with skepticism by exporters who said the purchase had only been deferred.

Routine exporter and crusher buying was met by commercial selling with exporter liquidation selling noted.
Farmer selling was light in the old crop, but cash dealers noted that farmer pricing has picked up significantly in the new crop this week.

Western barley ended higher in light trade as the absence of significant selling lifted the market amid a lack of interest in barley.
However, brokers noted with volumes so small, price movement was not significant.

The total barley volume was estimated at 15 contracts, down from 21 contracts on Tuesday, including an estimated 10 contracts involved in the spread trade.

Prices are in Canadian dollars per metric ton: