Winnipeg canola futures rose on Tuesday largely because of the two cent drop in the Canadian dollar.
The Bank of Canada left its key overnight lending rate at the record low of 0.25 percent, saying the strong loonie is more than offsetting other factors supporting the economy.
That would imply the bank is unlikely to raise interest rates in the future. Higher rates would add upward pressure on the value of the loonie.
Some analysts had been speculating that the bank would raise rates if the economy was recovering to lessen the possibility of inflation.
The loonie was also influenced by a stronger U.S. dollar.
November canola rose $2.50 to close at $396.50 per tonne on a volume of 8,862 contracts.
January climbed $4.20 to end at $403, with a volume of 10,965 contracts.
The Canadian dollar rallied to $95.24 at noon on Tuesday, down from 97.01 on Monday.
The U.S. dollar was $1.05 Cdn compared to $1.0308 on Monday.
November barley rose $1 to $154 per tonne. January barley fell $1 to $156.
The canola rally ran counter to a pull back in Chicago soybean futures, which closed lower as traders took profits after the recent rally. Prospects for a big South American soybean crop overhung the market.
The Canadian Wheat Board said about 10 percent of the wheat crop, five percent of durum and eight percent of barley are still in the field. About 20 percent of canola is yet to be harvested.
The forecast for Western Canada has turned wetter, with a chance of rain every few days.
Long-range forecasts for the U.S. Midwest soy and corn area show wet conditions stretching into next week.
Crude oil hit $80 US per barrel early in the day but closed at $79.09, the first time in a week that it closed lower than the day before.
