By Dave Sims, Commodity News Service Canada
WINNIPEG, January 21 – Canola contracts on the ICE Futures Canada platform were stronger at 10:40 CST Wednesday, as a sudden drop in the Canadian dollar sent canola values higher.
The Bank of Canada’s decision to cut the key interest rate by a quarter-percentage-point shocked investors, who widely expected the rate to stay at one percent. The Canadian dollar was trading below 81 US cents, having lost nearly two cents since the start of the day.
The currency turmoil may not be over, warned an analyst, who pointed out the European Central Bank is scheduled to make a major announcement tomorrow, on whether or not to begin a round of quantitative easing.
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“The Canadian dollar could get hammered even further,” the analyst said.
Northern areas of South America are turning hotter and drier which is expected to be a negative influence on the soybean crops which are entering their critical pod-setting stage, according to a report.
Commercial interest remains steady.
However, the vegetable oil market was under pressure this morning with Malaysian palm oil and soyoil both lower. Soybeans were also showing weakness which was bearish for canola values.
Around 21,000 contracts had traded as of 10:40 CST, Wednesday.
Milling wheat, durum and barley were all untraded and unchanged.
Prices in Canadian dollars per metric ton at 10:40 CST:
