Canola futures advanced again Tuesday, supported by a weaker loonie and strong domestic demand.
Canola crushers have good processing margins and were featured buyers.
The upside was limited by thoughts that the crop is larger than what Statistics Canada estimated in September.
Also, the canola price is in an overbought position, according to the relative strength index.
Chicago soybean futures have been supported by the fact U.S. soybean exports to China are running 14 percent ahead of last year’s record pace.
Support has also come from dry conditions in parts of Brazil that have delayed seeding. But oilseed analyst Oil World said today rain is starting to cover more regions and forecasts are for the rainy season to begin in November. Also, Argentina has received favourable rain so far this growing season.
Oil World said that although La Nina events tend to deliver dry weather to South America, it is too early to say there will be significant damage this year. If the market gives up on the idea of La Nina crop damage, it could cause a setback in oilseed prices.
Wheat futures rose after the U.S. Department of Agriculture issued its first winter wheat condition report of the season. It rated the crop at only 47 percent good to excellent, the worst rating in eight years. Last year at this point it was 62 percent.
The crop is suffering from dry conditions as it heads into winter dormancy. That could affect the amount of winter kill, but spring rain is the key factor in determining yields.
In Winnipeg on Tuesday, November canola rose $1.60 per tonne to $527 on 7,498 trades.
The January contract rose $1.90 to $537 on 17.098 trades.
The previous day’s best basis narrowed to $17.43 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 89, 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.
December barley futures were unchanged at $180 per tonne. March was unchanged at $185.
Chicago new crop November soybeans rose 1.25 cents to $12.19 US per bushel. January rose one cent to $12.31.
December corn rose 2.25 cents to $5.71 per bu.
December oats rose six cents to $3.71 per bu. March oats rose six cents to $3.83.
In New York, crude oil for December delivery rose three cents to $82.55 per barrel.
The Canadian dollar at noon was 97.82 cents, down from 98.06 cents the previous trading day. The U.S. dollar at noon was $1.0223Cdn.
The TSX composite index closed at 12,684.68, up 20.10 points. The S&P 500 rose 0.02 points to close at 1,185.64.
