After a weak morning, canola rallied to close higher on Tuesday, helped by a slowdown in farmer selling and stronger soy oil and crude oil prices.
The slowdown in farmer selling reduced grain company hedge activity, allowing prices to rise.
Prices continue to be supported by the general outlook for a smaller canola crop in Canada this year and hot weather in Europe that is expected to shave its rapeseed crop.
Prices were also supported Tuesday by strong European rapeseed futures.
In Winnipeg, November canola rose $7.10 per tonne to $459.90 on 8,710 trades.
The January contract rose $8.10 to $461 on 2,177 trades.
The previous day’s best basis was $5 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 86 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.
The Canadian dollar at noon was 95 cents US, up from 94.71 cents at noon the previous trading day. The U.S. dollar at noon was $1.0526. The Bank of Canada raised benchmark interest rates by 25 basis points today to 0.75 percent as expected, but warned problems with deficit and debt in many European countries will slow global and Canadian growth. It shaved its Canada gross domestic product growth outlook for this year to 3.5 percent from 3.7 percent. This raised doubts about whether it would continue to raise interest rates later this year.
Winnipeg October barley was steady and untraded at $156.50 and December was $156.50.
Chicago August soybeans rose 3.75 cents to $10.1175 US per bushel. September rose 0.5 cents to 9.8675. New-crop November rose one cent to $9.73.
Following weaker corn, September oats fell 4.5 cents to $2.56 per bu. December oats fell 4.5 cents to $2.635 per bu. Corn rose on expectations that thunderstorms accompanying hot weather in the U.S. Midwest would help crops survive the heat.
In New York, crude oil for August delivery rose 90 cents to $77.44 US per barrel. Oil recently has been taking its cue from equity markets, which are acting as a barometer for global economic health.
