Soybeans, dollar will influence canola in days ahead

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Published: July 24, 2019

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WINNIPEG, (MarketsFarm) – For canola prices, the key influences will be soybeans as well as the Canadian dollar, according to Errol Anderson of ProMarket Communications in Calgary, Alta.

Anderson said soybeans on the Chicago Board of Trade (CBOT) were higher, due to trade negotiations between United States and China resuming on July 29. That could push the November soybean contract to US$9.30 per bushel or higher, and in turn November canola could reach C$460 per tonne, he said.

“But if we get that high…it’s an opportunity to scale in pricing, or put options, or just short the market as a guard,” Anderson commented.

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However, he added a note of caution in that ProMarket issued an alert, warning prices for wheat, corn and soybean could fall for the next 10 to 14 days. Once mid-August arrived, a frost premium could be added, he said.

For canola, he said that could mean it dropping to C$440 per tonne.

Another factor that will influence canola bids will be the Canadian dollar, Anderson stated. Since Statistics Canada issued its report that June retail sales were down, the loonie has been declining from its year high. As the dollar drops below 76 U.S. cents it will begin to provide support for canola rather than weighing on its value.

There could be a snag, he warned, that U.S. President Donald Trump has been pushing for a weaker U.S. dollar. The U.S. Federal Reserve is set to announce its interest rates at the end of July, and “that will determine the pathway of the Canadian dollar,” Anderson said.

About the author

Glen Hallick

Glen Hallick

Reporter

Glen Hallick grew up in rural Manitoba near Starbuck, where his family farmed. Glen has a degree in political studies from the University of Manitoba and studied creative communications at Red River College. Before joining Glacier FarmMedia, Glen was an award-winning reporter and editor with several community newspapers and group editor for the Interlake Publishing Group. Glen is an avid history buff and enjoys following politics.

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