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Howard Leaman                                                     Aug 17/18

     Canola traded on both sides of unchanged on Friday, ending slightly
higher. The market held up rather well given the spillover selling from the
soy complex and strength in the Canadian dollar. Forecasts calling for
favourable weather in key U.S. soy crop areas weighed on prices on both
sides of the border, with canola seeing additional pressure from talk that
it was overpriced relative to soy. The Canadian dollar dipped below $.76
U.S. early on Friday, but rallied back strongly to post a four tenths of a
cent gain following the release of the Stats Can inflation report. Canadian
inflation was at a seven year high of 3% in July, raising expectations of
an interest rate hike that would strengthen the Canadian dollar. 
     The selling in canola was curbed by continued concern that hot and dry
conditions in western Canada this year likely curtailed canola yields.
Strength in palm oil and European rapeseed also lent support to canola.
Further, late buying in soy lifted prices towards their highs for the day
with soy oil ending higher. 

                                   Resistance     Support
               Nov Canola          512.90         501.00
               Jan Canola          518.50         506.20

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