Commodities, including canola, bounced back on Wednesday, lifted by a favourable response to the U.S. president’s state of the nation address and the U.S. Federal Reserve’s decision to maintain its stimulous policy.
Canola and soybeans gained modestly in the updraft created by very strong wheat prices. Surging demand from North Africa pushed wheat higher.
Rain in Argentina capped the increase.
Barack Obama’s speech Tuesday night mentioned the administration’s intention to cut corporate taxes.
Today, the Fed said high unemployment in the U.S. justified carrying on with its plan to buy $600 billion in bonds to stimulate the economy.
Canada’s federal government approved another round of increases to Canadian Wheat Board initial payments.
The increases are effective Jan 31. The increase will range from $22.20 to $37.45 per tonne for wheat (depending on grade and class), $25.50 to $43.60 per tonne for durum, $54 per tonne for Pool A feed barley and $37.50 per tonne for designated barley.
The Canadian Wheat Board also announced the 2010-11 initial payment for the Pool B feed barley effective Feb. 1 for deliveries from Feb. 1 to July 31. The initial payment for No. 1 Canada Western barley is $130 per tonne.
In Winnipeg on Wednesday, March canola rose $2.80 to $594.50 on 9,209 trades.
May rose $3.20 to $603.20 on 3,723 trades.
The November 2011 contract rose $3.30 to $564.
The previous day’s best basis narrowed to $28 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 56. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
March barley futures were steady and untraded at $194. May was steady at $200 per tonne.
Chicago March soybeans rose 10.5 cents to $13.85 per bushel.
March corn rose 13.75 cents to $6.5775 per bu.
March oats rose seven cents to $3.88 per bu.
March Minneapolis hard spring wheat rose 21 cents to $9.77 per bu.
In New York, crude oil for February delivery rose $1.14 to $87.33 US per barrel.
The Canadian dollar at noon was $1.0047 US, up from 1.0014 cents the previous trading day. The U.S. dollar at noon was 99.53 cents Cdn.
The Toronto Stock Exchange composite index rose 134.81 points to 13,394.44.
Standard & Poor’s 500 Index rose 7.20 points to 1,298.38.
