WINNIPEG, Manitoba (Reuters) - Canadian canola futures rose 4 percent on Monday after U.S. soybeans shot up their daily limit on the weaker U.S. dollar, hopes for Chinese demand, and weather concerns, traders said.
"We're going to be sharply higher when they're up the limit," a trader said, noting speculative short covering provided much of the support to canola.
ICE canola futures settled $21.90 to $24 per metric ton higher, with benchmark November up $23.90 to $566.70.
Crushers were featured buyers as soybean oil futures climbed and the Canadian dollar remained weak, traders said.
"The (canola) seed is nowhere near as high as where the beans are," a trader said.
At the Chicago Board of Trade, September soybeans were up 67-1/2 U.S. cents to U.S.$12.79 and September soyoil was up 2.48 U.S. cents per pound at 52.52 U.S. cents.
Some farmer hedging was seen, but producers continued to hold back from selling canola despite the gains, traders said.
"Guys want to hold on for the best returns they can possibly get," a trader said.
"The crop looks fantastic out there," another trader said, noting current hot, dry weather was helping crops reach maturity.
An estimated 411 November/January spreads traded from $10.50 to $11.40.
Volume was estimated at 6,781 contracts, up from a total of 4,731 on Friday.
Barley futures were pulled higher by soaring U.S. corn futures, but trade was thin. October barley was up $1.80 at $220.80.
Total volume was 38 contracts, down from 211 on Friday.
Reporting by Roberta Rampton; Editing by Christian Wiessner