Headline News

Howard Leaman                                                     Jul 21/17


Canola started last night's session on a firmer note, but the bias has
turned to the downside. Palm oil and European rapeseed are firmer this
morning, but the soy complex is on the defensive. The Canadian dollar is up
about a tenth of a cent against the U.S. dollar. Trading in canola could be
choppy today as traders move to the sidelines ahead of the weekend. The
weather outlook can change dramatically over a couple of days, and no one
wants to be on the wrong side of the market. Technically, canola appears to
be locked in a narrow consolidation pattern. Stats Can will release its
latest estimate of Canadian inflation today which could effect the Canadian
dollar and subsequently canola.

BULL SIDE                               BEAR SIDE
1) The weather continues to dominate    1) Some North American crop areas
the markets. Hot and dry conditions in  are enjoying favourable weather,
western Canada and northern U.S. soy    and large U.S. soy production is 
growing areas are providing underlying  still a possibility. 
support.                                2) The Canadian dollar continues to
2) Canadian canola supply is tight,     strengthen against the U.S. dollar
and there is growing talk that this     as it rallies towards a fifteen
year's crop will not be large enough    month high. 
to rebuild stocks. Accordingly, higher  3) Canola could see spillover   
prices are needed to ration demand.     selling from soy today.