MarketsFarm — Canola was bolstered by strong trade activity and profit-taking at midweek, though values remained rangebound.
As of Wednesday, 144,500 canola contracts had traded hands, with the most activity concentrated in the January/March contracts. Spreading accounted for 124,790 contracts traded, which is about 86 per cent of the activity.
Keith Ferley of RBC Dominion Securities said although soybeans are providing the most direction to canola prices, technical short-covering and high trade volumes are also “pushing positions forward.”
Canola started the week stronger by about $5 per tonne, but gave back some gains in response to a dip in the vegetable oil market.
Vegetable oil prices were lower at midweek, due to weakened Malaysian palm oil futures. According to one private company, price rationing is lowering demand for palm oil. However, canola remains competitively priced against its counterparts.
The Canadian dollar squeaked above 76 U.S. cents, which has also provided some pressure for canola values.
Strong domestic crush margins have also been favourable for canola. According to ICE, as of Tuesday, crush margins are $123 above the January contract.
— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.