Canola futures closed higher in light trade Wednesday as profit taking and commercial hedging that had weighed on the market the day before dried up.Strong demand from domestic crushers has kept the price strong, but basis levels have widened.There was slight support from Chicago crop futures.Good rain in Brazil’s soybean growing regions limited grains.The U.S. dollar is expected to be weaker on Thursday following the policy announcement from the U.S. Federal Reserve and that should support soybeans, corn and wheat. The Fed announced it would, in a new stimulus effort, buy $600 billion in government bonds by the end of June 2011. The purpose of the move is to lower borrowing rates on products such as mortgages.It will also drive the U.S. dollar lower, stimulating exports because American products will appear more affordable to consumers in countries with stronger currencies.The $600 billion program was a little higher than expected, which initially caused the greenback to fall sharply but it later recovered to close down modestly. However, analysts expect U.S. dollar weakness to continue.In Winnipeg, November canola rose $1.10 per tonne to $534.80 on 13 trades. The contract is in delivery mode.The January contract rose $1.20 to $541.40 on 6,580 trades.The November 2011 contract fell 60 cents to 511.90.The previous day’s best basis widened to $25.13 per tonne under the November contract in the par region, according to the Winnipeg ICE Futures daily report.We have changed our 14-day Relative Strength Index calculation to the one used by Reuters and others, which appears to be a more commonly used figure. The November contract RSI was 79. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.December barley futures lost the gains it made on Tuesday, falling $5.50 to $180 per tonne on five trades. March was unchanged at $185.Chicago new crop November soybeans fell 1.5 cents to $12.2375 US per bushel. January fell one cent to $12.34.December corn rose 5.25 cents to $5.81 per bu. December oats fell 0.5 cents to $3.615 per bu. March oats fell 0.75 cents to $3.7375.In New York, crude oil for December delivery rose $1.18 to $85.08 US per barrel.The Canadian dollar at noon was 99.09 cents US, up from 99.02 cents the previous trading day. The U.S. dollar at noon was $1.0092.The TSX composite index fell 10.30 points to close at 12,671.12. The S&P 500 rose 4.31 points to close at 1,197.88.
Canola edges higher – for Nov. 3, 2010
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