Canola futures catch up to European prices

Winnipeg canola jumped higher Tuesday as it caught up with other markets that were open Monday.The market was also supported by talk of new canola export business to Mexico and stronger crude oil prices.Oilseed markets in Europe and the United States rose Monday, mostly on spill-over support from wheat, which continued to rise on expectations of smaller exports from the Black Sea region and Europe. Chicago wheat pushed past the psychologically important milestone of $7 US per bushel Monday, the highest level in 22 months.Russian leaders declared a state of emergency Monday because of scorching heat and drought, wilting crops and wildfires.However, wheat fell today because traders believe prices have run up enough to account for the reduced production. Russian officials said they had no intention of restricting wheat exports.Influential oilseed analyst Oil World reduced its global canola-rapeseed production forecast to 56.07 million tonnes from 59.87 million last year.Oil World lowered its forecast for European rapeseed production to 19.9 million tonnes, down 7.8 percent from last year.With smaller crops in Europe and the former Soviet Union, Oil World said buyers would have to rely on Canada, which will also have a smaller crop. Oil World’s forecast for Canada’s crop is 10 million tonnes.It said global stocks at the end of 2010-11 would likely fall to 4.96 million tonnes from 6.59 million at the end of 2009-10.In Winnipeg, November canola rose $5.70 per tonne to $465.30 on 9,933 trades.The January contract rose $5.90 to $467.50 on 790 trades.The previous day’s best basis widened to $13.90 per tonne under the November contract in the par region, according to the Winnipeg ICE Futures daily report.The 14-day Relative Strength Index for November was 73 according to BarChart.com. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.The Canadian dollar at noon was 97.8 cents US, up from $97.18 the previous trading day. The U.S. dollar at noon was $1.0225 Cdn.Winnipeg October barley was steady and untraded at $159.10 and December was also steady at $159.10.Chicago August soybeans rose 0.25 cents to $10.535 US per bushel. September rose 3.5 cents to $10.2275. New-crop November rose eight cents to $10.18.September oats fell 1.5 cents to $2.75 per bu. December oats fell 1.5 cents to $2.88 per bu. In New York, crude oil for September delivery rose $1.21 to $82.55 per barrel.

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