Winnipeg canola futures broke through technical resistance Tuesday, rising 1.2 percent as commodity funds bought heavily.
Stronger crude oil prices added support, but a sharply higher Canadian dollar limited the gains.
Traders expect Parliament will force striking Canadian National Railway engineers back to work soon and send the dispute to binding arbitration.
January canola settled Tuesday at $413.60 per tonne, up $4.80 from Monday on a volume of 16,725 contracts.
March rose $4.70 to close at $420.40 per tonne on a volume of 6,015 contracts.
The Bank of Canada at noon Tuesday said the Canadian dollar was worth 95.86 cents US, up from 94.57 cents Monday. The U.S. dollar was worth $1.0432 Cdn.
The Winnipeg January barley contract was steady at $160.50 per tonne with no trades. March was steady at $162 per tonne with no trades.
Chicago soybeans rose early in the day as the U.S. dollar fell. There were expectations that funds would add to the momentum, but when that didn’t materialize a round of profit taking pushed the market lower with January soybeans closing down one cent at $10.595 US per bushel.
Oilseed analyst Oil World warned that, even with strong exports, soybean prices could fall if investment funds take profits before year end, capitalizing on a strong rally in recent weeks.
Since Nov. 10, January soybeans have rallied 9.4 percent and canola has rallied 7.9 percent.
Investors generally put money in commodities Tuesday as the U.S. dollar depreciated, fueling worries about inflation. Commodity prices rise in inflationary periods and are seen as a hedge against inflation.
Investor fears of another market meltdown were calmed by news Dubai World plans to restructure about half its $54 billion debt. The company, owned by the Persian Gulf state, shook markets last week when it said it planned to suspend payment on its debts for six months.
