By Jade Markus, Commodity News Service Canada
WINNIPEG, August 15 (CNS Canada) – ICE Canada canola contracts were stronger at midday on Monday, tracking advances in Chicago Board of Trade soybeans.
Canola gathered spillover support from CBOT soybeans despite large production numbers from the United States Department of Agriculture (USDA).
“The follow-through today is a little bit surprising,” said one Winnipeg-based trader.
“I think traders are worried US crops might not be that big. They’re probably a little bit concerned that if those crops turn down a little bit it won’t look nearly as bearish,” he said.
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The USDA estimates domestic soybean production will reach a record 4.06 billion bushels. However, the trader added that aggressive demand estimates from the government agency are keeping the market underpinned.
Advances in the Canadian dollar against its US counterpart limited some gains on Monday.
A stronger loonie makes canola less appealing to international buyers.
Concerns about new dockages standard from China also capped advances, the trader said.
“I imagine canola traders are a little reluctant to chase after the soy markets, given the China issue was the talk on Friday, ending with no apparent resolution,” he said.
China is set to implement a new dockage standard on September 1, which would allow just one per cent of organic waste material, otherwise known as dockage.
International standards allow for 2.5 per cent dockage.
About 7,024 contracts had traded as of 10:20 CDT.
Milling wheat, durum and barley futures were all untraded and unchanged.
