ICE Canada canola futures closed higher on Friday on support from the weaker Canadian dollar and modest buying by funds, traders said. Canola rose 4.1 percent during the first week of bearish import restrictions in China, possibly reflecting optimism of a resolution with Canada's Prime Minister visiting China next month. The weaker dollar, which makes exports more attractive, may have encouraged buying by exporters and crushers, a trader said.
Funds bought 1,000 January contracts to cover shorts and even their net position. Pressure mainly came from grain companies hedging their purchases from farmers with harvest nearly complete. January gained $3 to settle at $406.80 per tonne with a volume of 10,492 contracts. March rose $2.70 to settle at $413.40 per tonne on a volume of 1,292 contracts.
The January-March spread traded 1,079 times, with a premium to March between $6.10 and $6.90. Canadian processors have crushed 7.9 percent less canola since August 1, year to date, compared to a similar period last year. CBOT January soybeans closed up 7 US cents at US $10.46 a bushel, supporting canola which is also used for biofuel and vegetable oil.
The Canadian dollar was trading at $1.0715 against the US currency or 93.33 US cents at 1:07 pm CST (1907 GMT), down from Thursday's close of $1.0635 against the US dollar or 94.03 US cents. Light crude oil was trading 68 US cents lower at US $76.78 per barrel.
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