A return to bullishness swept the grain and oilseed market on Thursday, pushing canola up 2.6 percent.
Traders felt the pullback earlier this week had gone too far. The lower prices also stimulated canola buying and created worries that the price would not attract enough seeded acres this spring.
Canola was also supported by rising Chicago soybean and corn futures, which rallied on news that China was considering cutting import taxes on food to fight inflation.
Chicago wheat posted modest gains, helped by strong weekly U.S. export sales. Also, China’s agriculture ministry said the drought in the winter wheat region is likely to continue. Areas that benefited from recent snow and emergency irrigation could be pressured again as temperatures rise. The second half of February is expected to be warmer and drier than normal.
Reuters reported that Chinese officials had not produced details of the import tax cut plan, but influential trading firm JCI cited a trader in Singapore as saying China may cut the soybean import tax to one percent from three percent, and the soyoil import tax to five percent from nine.
Palm oil fell on the belief that China would not cut the duties on palm oil, which stand at nine percent.
There was no word on whether China would change the duty on canola and canola oil.
Winnipeg
Canola Mar 11 $589.80 per tonne up $14.80.
Canola May 11 $598.10 up $15.20.
Canola Jul 11 $605.70 up $15.50.
Canola Nov 11 $579.80 up $16.70.
The previous day’s best basis was $16.60 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 46. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Mar 11 $194 unchanged.
Western Barley May 11 $205 unchanged.
Chicago
Soybeans Mar 11 $14.04 ½ per bu., up 38 ½ cents.
Soybeans May 11 $14.16 ½, up 38 cents.
Corn Mar 11 $7.12 ¾ per bu., up 22 ¼ cents.
Corn May 11 $7.23, up 22 cents.
Oats Mar 11 $4.15 per bu., up 10 ½ cents.
Oats May 11 $4.22 ¾, up 10 ¾ cents.
Minneapolis
Spring Wheat Mar 11 $9.81 per bu., up 23 ½ cents.
Spring Wheat May 11 $9.90 ¾, up 23 ¾ cents.
Spring Wheat Dec 11 $10.11, up 24 ¾ cents.
In New York, crude oil for March delivery rose $1.37 to $86.36 US per barrel.
The Canadian dollar at noon was $1.0164 US, up from $1.0147 the previous trading day. The U.S. dollar at noon was 98.39 cents Cdn.
The Toronto Stock Exchange composite index rose 76.97 points to 14,136.15.
The Standard & Poor’s 500 index rose 3.95 points to 1,340.27.
The core Consumer Price Index in the U.S., which excludes volatile food and energy, costs, increased 0.2 percent in January after a 0.1 percent rise in December.
It was the largest increase since October 2009 but most analysts believe it will have to climb more before the U.S. Federal Reserve reverses its policy of increasing the money supply.
