By Jade Markus, Commodity News Service Canada
WINNIPEG–ICE Canada canola contracts were stronger on Tuesday, supported by losses in the Canadian dollar and gains in Chicago Board of Trade soy oil.
The loonie lost ground against its US counterpart on Tuesday, as high crude oil supplies, and the expectation that the US Federal Reserve could raise interest rates this summer pressured the currency.
A weaker Canadian dollar is bullish as it makes canola more affordable to international buyers.
Chicago Board of Trade soy oil was stronger at midday, supported by overnight gains in Malaysian palm oil, which spilled over to prop up canola.
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However, hedge sales limited gains on Tuesday, one Winnipeg-based trader said.
Farmers have increased selling due to an improved outlook for crops in Western Canada.
Widespread rains throughout the Prairies capped advances on Tuesday.
“Any potential dryness in Western Canada right now is not an issue,” the trader said.
Some areas could see too much rain, but dryness often has a bigger impact on crops, the trader said.
He added that end-of-month trading could add extra volatility to the market near close.
“Today being the last day of the month there could be wild and crazy things happening at the end,” he said.
About 12,786 contracts had traded as of 10:35 CDT.
Milling wheat, durum and barley futures were all untraded and
unchanged.
