May 7, 2009

Canola contracts on the ICE Futures Canada platform traded mostly higher Wednesday (May 6) with some price action associated with steady domestic processor demand and advances in the CBT soy complex, market watchers said.

Some of the early strength in canola came from the gains overnight in Malaysian palm oil, e-CBOT soy, and Matif rapeseed futures.

Domestic processors were said to be aggressively buying canola in view of very profitable crush margins, brokers said. There was talk that most crushers have now booked canola to cover processing needs for the next six months out.

The absence of marketings by producers helped lift canola, with most farmers said to be concentrating on spring fieldwork and planting in view of improved weather conditions across most of western Canada, traders said.

Additional strength in canola came from light, technically based speculative buying. Gains in global crude oil values were also supportive.

Some position evening ahead of Friday's (May 1) grain stocks in all positions report from Statistics Canada was a small feature of the activity.

The upside in canola was limited by the firm Canadian dollar and the lack of fresh export business being put on the books, traders said. A small reduction in routine export demand also limited the upside.

Japan, one of Canada's regular canola customers, was off this week in celebration of its Golden Week holidays.

Talk of active planting progress was viewed as an undermining price influence in canola, brokers said.

An estimated 5,855 canola contracts traded at 10:59 a.m. CDT. No western barley futures had changed hands.