November 16, 2009

Canola contracts traded on the ICE Canada platform were higher at 12:05 EST Friday (November 13), with spillover buying from the gains seen in CBOT soy and soymeal behind much of the strength.

Concerns about vomitoxin in US corn led to gains in soymeal on talk that soymeal was displacing corn in feed rations, said a canola broker. He thought the demand for soymeal could also open the door for more canola meal sales to the US, which have been limited due to salmonella in some Canadian shipments.

Domestic crushers were noted buyers, according to the broker. Speculators were also on the buy side, although there was no significant fund activity.

Exporter pricing to cover business to countries other than China was also noted by the broker.

Light hedge pressure limited the upside in canola. However, the broker said the fact that the harvest was nearly complete was causing farmer sales to slow down.

Strength in the Canadian dollar and a weaker tone in crude oil also put some pressure on canola.

At 12:05 EST, about 2,200 canola contracts had changed hands.

Western barley futures were steady to lower, with only 1 contract traded by midsession. The increased availability of feed grains in western Canada, with the last of the grain harvest coming off in tough/damp condition was thought to be keeping barley prices under pressure.