Canola futures jumped higher Tuesday, pushed up by rising soybeans prices as the U.S. dollar fell.
Commodity and equity markets in general rose and the U.S. greenback fell after central banks indicated they would do more to stoke struggling economies world wide.
The United States Federal Reserve has been talking about ways to make money more available for economic development and the Bank of Japan unexpectedly cut rates close to zero today and plans to pour more money into the market to prime the economic pump.
If the stimulous works, the more robust global economy would need more raw materials to feed factories, construction and consumer demand.
A feeling that recent declines were overdone also supported crop prices.
At the ICE Canada exchange, traders are starting to roll November canola contracts into the January contract.
On Monday one private Brazilian analyst projected a record soybean crop in the South American country. However, today a Reuters poll of eight analysts showed the average of the range of forecasts was 67.9 million tonnes, down from 68.6 million last year, despite expectations of larger planted acreage. The range was 65 million to 69.8 million.
Analysts said last year’s El Nino delivered ideal rainfall, but with the trend to a La Nina this year, there is potential for a drier growing season.
In Winnipeg, November canola rose $7.50 per tonne to $468.50 on 13,719 trades.
The January contract rose $8.70 to $481.80 on 11,144 trades.
The previous day’s best basis was $19.13 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 58 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.
Winnipeg October barley was steady at $174.50 per tonne. December was steady at $175.50.
Chicago new crop November soybeans rose 17.75 cents to $10.7175 US per bushel. January rose 17.5 cents to $10.815.
December oats rose 15.25 cents to $3.5275 per bu. March oats rose 15 cents to $3.6275.
In New York, crude oil for November delivery rose $1.35 to $82.82 US per barrel.
The Canadian dollar at noon was 98.35 cents US, up from 97.71 cents the previous trading day. The U.S. dollar at noon was $1.0168 Cdn.
The TSX composite index closed at 12,498, up 175.06 points. The S&P 500 rose 23.72 points to close at 1,160.75.
