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Howard Leaman                                                     Jan 17/18


Canola has traded on both sides of unchanged in overnight action, with the
bias turning to the downside. Palm oil, European rapeseed, soybeans and soy
oil are all lower this morning, while soy meal is mixed. The Canadian
dollar continues to hold steady against the U.S. dollar, virtually
unchanged this morning. The Bank of Canada is expected to announce today
that it will increase interest rates, and once that announcement is out of
the way there could be a sharp move in the dollar which could influence

BULL SIDE                               BEAR SIDE
1) The South American soy crop is       1) South American soy crop 
generally in good shape, but traders    conditions are generally favourable
are still concerned about dry           despite the concerns about hot and
conditions in parts of Argentina.       dry conditions in some Argentine 
Those areas have received rain          crop areas.
recently, but not enough to end the     2) The technical bias in canola is 
drought fears.                          to the downside, and any selling is
2) Traders appear to be reluctant to    apt to build on itself.
push the Canadian dollar higher         3) Canola is facing spillover 
against the U.S. dollar ahead of        selling from other vegetable oil
today's Bank of Canada announcement on  markets this morning.
interest rates.

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