ICE canola futures surge on soyoil spreads, smaller crop estimate

ICE canola futures surged on Friday on spreads against soybean oil and after a Canadian government report pegged the harvest smaller than expected.

* Canola has been trading at a large discount to soyoil and, with soyoil down sharply over disappointing U.S. government biofuels targets, investors bought canola to narrow the spread, a trader said.

* Further support came from diminishing Canadian canola supplies.

* Statistics Canada lowered its estimate of canola production to 18.2 million tonnes from 19.1 million in September.

* Most-active March canola (RSH3) rose $28.90, or 3.6%, to settle at $841.70 per tonne.

* January-March canola spread, the most active inter-month spread, traded 6,426 times.

* U.S. soybean futures ZS1! rose modestly, consolidating after a selloff in the previous session over disappointing U.S. biofuels levels.

* Euronext February rapeseed futures (/COMG3) plunged, weighed down by weakness in palm oil and soybean oil.