ICE Canola Rallies As Supplies Tighten

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By Phil Franz-Warkentin, Commodity News Service Canada

Dec. 5, 2012

Winnipeg – Canola contracts on the ICE Futures Canada platform were stronger at 10:53 CST Wednesday, as the market reacted to a bullish Statistics Canada production report and gains in the CBOT soy complex provided further support.

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In its final production estimate of the year, StatsCan pegged the 2012/13 (Aug/Jul) Canadian canola crop at 13.3 million tonnes. The revised number was only down slightly from the previous forecast, but many analysts had been anticipating a slightly larger crop. Canada grew a record 14.6 million tonnes of canola the previous year.
Concerns over planting delays for soybeans in Argentina and the resulting rally in the CBOT futures provided spillover support for canola as well, according to a trader.
Improving crush margins and a lack of farmer selling added to the strength in canola, said the trader.
However, technical resistance was holding to the upside, keeping the gains in check. A firmer Canadian dollar weighed on prices as well.

At 10:53 CST, about 12,000 canola contracts had changed hands with intermonth spreading accounting for nearly all of the volumes.
Milling wheat futures were steady to lower, with traders exiting the December contract behind most of the activity. Durum and barley futures were untraded and unchanged.
Prices in Canadian dollars per metric ton at 10:53 CST: