A weaker Canadian dollar and thoughts that canola was undervalued compared to other oilseeds pressed Winnipeg futures higher Tuesday.
January canola rose $4.60 to $402.50 Cdn per tonne, on a volume of 9,253 contracts.
March rose $4.50 to settle at $408.40 on a volume of 391 contracts.
Winnipeg January barley fell 50 cents to $157.50 per tonne. March also fell 50 cents to $157.50.
The loonie fell more than one penny as investor optimism dropped in the face of weaker than expected economic data in the United States, causing money to flow into the perceived safety of U.S. dollar and treasury bills.
Also, U.S. Federal Reserve chair Ben Bernanke said Monday the central bank was “attentive to the implications of the changes in the value of the dollar.” Bernanke said he also expected interest rates would stay low for an extended period, but some viewed the comment as meaning he wouldn’t let the greenback fall too far.
The Bank of Canada at noon said the Canadian dollar was worth 94.41 cents US, down from 95.6 cents the day before. The U.S. dollar was worth 1.0592 Cdn.
Canola was also supported by rising Chicago soybean prices, lifted by rising soy meal prices and forecasts for more rain that would further delay the U.S. harvest.
U.S. Department of Agriculture said Monday that 89 percent of the soybean crop had been harvested, shy of the 90 to 92 percent expected by analysts.
Oil World cut its forecast for Argentina’s soybean crop for the second time this month because of dry weather preventing seeding. The vegetable oil market watcher now thinks Argentina will produce 48 million tonnes, down two million from its last forecast. The USDA’s latest forecast is for 53 million tonnes.
The La Pampa region in central Argentina recorded only 16 percent of average rainfall in October.
At 48 million tonnes, that would still be far more than last year’s drought-reduced crop of 32 million tonnes, but producers there had planned to increase acreage to capitalize on relatively strong oilseed markets.
The dryness also prompted Oil World to drop its forecast for sunflower seed production by 510,000 tonnes to 3.2 million tonnes.
