Canola bounces back from oversold condition
By D’Arce McMillan
Saskatoon newsroom
A weaker loonie, stronger soybeans and lack of farmer selling helped Winnipeg canola futures to climb on Thursday.
The market was also supported by players who had previously sold canola at higher prices buying back the contracts at today’s lower values so as to lock in profits.
March canola rose $4.10 to close at $383.30 per tonne on 6,331 trades.
May rose $4.50 to close at $390.40 on 1,376 trades.
New crop November rose $3.60 to $402.30 on 804 trades.
The 14-day Relative Strength Index for March canola on Jan. 21 rose to 21. The rule of thumb is an RSI of 30 and lower indicates an over sold market and 70 and higher indicates over bought.
The Bank of Canada at noon Thursday said the Canadian dollar was worth 95.36 cents US, down from 95.44 cents the previous trading day. The U.S. dollar was worth $1.0487 Cdn.
The Winnipeg March barley contract fell 50 cents to $149.50 per tonne on 115 trades. May also fell 50 cents to $155.50 on no trades.
March soybeans rose four cents to $9.54 US per bushel.
Firm cash soy meal and more sales to China supported soybeans, as did a general feeling that all crop futures were oversold. Wheat and corn also rose.
Light crude oil in New York for February delivery fell to $75.98 US per barrel, down $1.76.
China’s customs department released its December report on canola and soybean imports today.
In December it imported 306,000 tonnes of canola, of which 298,000 tonnes came from Canada.
For the calendar year, China imported a record 3.21 million tonnes of Canadian canola. That represented 98 percent of its total canola imports. Small amounts came from Australia, Ukraine, Mongolia and Russia.
China’s demand in 2010 is uncertain because of its trade restrictions designed to block seed with blackleg fungus.
