ICE New Crop Canola Up On Uncertainties

Canola activity was moderate with intermonth spreading enhancing the volume of trade. Commercials are the main participants in the spread trade.

The total canola volume was estimated at 9,272 contracts, up from Wednesday’s 8,996 contracts.

Canola was a bit firmer in the overnight trade in the wake of strength in international vegetable oil markets. Canola held onto to modest gains as the North American trading session began and the Chicago Board of Trade soy complex rallied. Canola saw a choppy trade ending mainly higher with small gains in the actively traded new crop contracts while the old crop July contract saw small losses.

Canola drew much of its support from the lack of willing sellers as farmer selling has virtually ceased, said a cash dealer.
Other selling was also lacking.
"When you’re not sure of crop size how can sell (canola futures)," said a trader. With as much as 60% of the crop felt to be fair to poor, traders are taking a "wait and see" approach, said brokers.

Crop uncertainties, a weak Canadian dollar and a firm tone in vegetable oil prices all supported the market.
A technically focused trader noted that the charts are suggesting that the canola market is in a consolidation phase, but looks to be building toward a large move.

Limiting the upside in the market is the absence of fresh export demand as the uncertain size of the crop has caused exporters to be very cautious in making any new crop sales, analysts said.

Routine exporter and crusher pricing met mostly commercial selling with light elevator company hedging noted. Continued liquidation was also evident in the July contracts, traders said.

Western barley ended higher in light trade with all activity in the new contracts that are deliverable in southern Alberta. Crop uncertainties and lower barley plantings this year gave some support, brokers said. End user demand was steady but not aggressive while commercial offerings tended to be a "few dollars above the market", said a trader.

The total barley volume was estimated at 173 contracts, down from 208 contracts on Wednesday.

Prices are in Canadian dollars per metric ton: