The Good: Canola continued to move higher today, despite strength in the loonie and lower soybean oil prices. With the move today, canola is challenging contract highs set in February and April. Canola is trading lower in the overnight session, but the recent move has been impressive. With higher canola oil prices in China, markets are expecting a resumption in Chinese purchases over the next few months.
The Bad: Soybean oil futures have been moving lower over the past three days which has pushed values close to the technically important 29 cent per pound level. Tightness in the global vegetable oil market has supported both palm and soybean oil values. This maybe constructive in the longer term, but for now soybean oil appears to be headed lower.
The Ugly: The U.S. dollar is making a quick move lower over the past two trading sessions and is now hitting two year lows. The long term average for the U.S. dollar index is close to 95 points, so this move below 94 is significant. The move lower does open up the possibility that the market may test the 90 point level. There are many reasons for the move lower in the U.S. dollar – record deficits, poor economic prospects and poor COVID-19 control across the country – take your pick. Whatever the reason, the U.S. dollar is headed lower and other currencies, including the loonie are appreciating.