Canola rebounds from oversold condition

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Canola futures on Monday partially rebounded from sharp losses on Friday.Traders stepped back into the market on the belief that Friday’s losses, related to China’s inflation fighting policy, were overdone.Also, crushers were buying because their profit margins had improved.Soybeans also rebounded on Monday, but the big mover was Chicago corn, which gained four percent.Talk that China was meeting with Argentina to discuss buying large quantities of corn sparked the rally. Argentina is the world’s second largest corn exporter after the U.S. If a lot of its grain is committed to China, the United States would be able to move into markets normally served by Argentina.Some areas of the U.S. winter wheat crop got rain last week, but the U.S. Department of Agriculture on Monday rated the winter wheat crop at 46 percent good to excellent, its lowest mid-November condition rating since 2001. The crop planted in 2001 produced only 1.14 billion bushels with a yield of only 38.5 bu. per acre. The 2010 crop had an average yield of 46.8 bu.Kansas and parts of Texas are still too dry to produce a strong crop. In Winnipeg, the January canola contract rose $11.50 to $548.60 per tonne on 10,183 trades.The March contract rose $11.60 to $555.60 on 826 trades.The November 2011 contract rose $20.30 to $507.The January contract RSI was 61. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.December barley futures were unchanged at $180.10 per tonne. March was unchanged at $185.Chicago January soybeans rose 17.5 cents to $12.865 US per bushel. March rose 16.75 cents to $12.9375.December corn rose 21.5 cents to $5.555 per bu.December oats rose seven cents to $3.465 per bu. March oats also rose seven cents to $3.59.In New York, crude oil for December delivery fell two cents to $84.86 US per barrel. The Canadian dollar at noon was 99.35 cents US, up from 99.21 cents the previous trading day. The U.S. dollar at noon was $1.0065.The TSX composite index fell 13.83 points to close at 12,735.41. The S&P 500 fell 1.46 points to close at 1,197.75.

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