The Good: Canola staged a strong rally today which had all the earmarks of some export sales activity. The January 2022 contract closed the session up C$16.90 per tonne to close at C$932.20 per tonne. This continues the string of five consecutive sessions where canola posted gains on the day. The contract is up by nearly US$90 per tonne from the recent lows set in the first half of September. Stronger soybean and soybean oil futures provided some support for canola, but it appears that canola showed independent strength in todays trading action.
The Bad: Oat futures were lower today as the nearby December contract dropped six cents per bushel to close at US$6.56 per bushel. The oat market is still dealing with limited supplies from North America, but the nearby futures contract is showing some topping action in the past six trading sessions. This should not be a surprise as oat prices are at all the records and demand is certainly being rationed. The problem is that oats have a very strong demand profile for human and equine feed use. This is recent trading action is likely a pause rather than an indication that the market peak has been established.
The Ugly: The loonie remains on a uptrend that started in the middle of September. The loonie has rallied by nearly three U.S. cents since that point in time. The problem with the stronger loonie is that farm gate prices will be hurt by the stronger currency. With oil prices closing near the US$83 per barrel mark, the rise in the currency could have been worse. Look for the loonie to continue to march higher if energy continue to rise. This is the crude of the petro-loonie.