ICE Close: Short Covering Takes Canola Higher

Canola futures were stronger on Tuesday, taking some direction from Chicago Board of Trade soybeans and soyoil.

The slow pace of spring seeding in the United States Midwest sparked a rally in the Chicago grain and oilseed markets, which encouraged some speculative short-covering in the Canadian market as well, according to a trader.

Dryness concerns in parts of Western Canada and forecasts calling for colder Prairie temperatures into the end of May were also supportive.

Some technical stops were hit on the way up, which added to the firmer tone. However, the longer-term downtrend remains intact, and canola settled well off its highs for the day.

Ongoing uncertainty over trade relations with China also kept some caution in the canola market.

July canola was up $5.80 at $441.70, November gained $6.50 to $453.20 and January added $5.60 to $458.60.

Source: DePutter Publishing Ltd.

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