The full impact of yesterday’s stimulus announcement by the U.S. Federal Reserve was felt today as the U.S. dollar fell and commodity and equity prices rose.
Chicago crop futures soared higher, pulling Winnipeg canola along for the ride.
The Canadian dollar moved closer to par with the U.S. greenback.
The Fed will buy $75 billion in Treasury bonds per month until June. The strategy, called quantitative easing, is designed to lower long-term interest rates and increase the supply of money to stimulate the economy.
The move also weakens the U.S. dollar, stimulating its exports.
Chicago wheat and soybeans each gained three percent and corn rose 1.6 percent.
In Winnipeg, November canola jumped $11 per tonne, or two percent, to $545.80 on 38 trades. The contract is in delivery mode.
The January contract rose $9.50 to $550.90 on 9,977 trades.
The November 2011 contract rose $6.30 to $518.20.
The previous day’s best basis was $25.13 per tonne under the November contract in the par region, according to the Winnipeg ICE Futures daily report.
We have changed our 14-day Relative Strength Index calculation to the one used by Reuters and others, which appears to be a more commonly used figure. The November contract RSI was 83. 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 37.25 cents to $12.6475 US per bushel. January also rose 37.25 cents to $12.7475.
December corn rose nine cents to $5.90 per bu.
December oats rose 16 cents to $3.775 per bu. March oats rose 16.25 cents to $3.90.
In New York, crude oil for December delivery rose $1.80 to $86.49 US per barrel.
The Canadian dollar at noon was 99.76 cents US, up from 99.09 cents the previous trading day. The U.S. dollar at noon was $1.0024.
The TSX composite index rose 207.67 points to close at 12,878.79. The S&P 500 rose 21.27 points to close at 1,219.23.
In its final crop report of the year, Saskatchewan Agriculture said the harvest is all but complete with yields average to above average but quality below average. However, the majority of canola, flax and mustard is expected to be in the top grade.
