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Howard Leaman                                                     Jan 18/19

MIXED

Canola has been on the defensive from the start of overnight action, but
the losses have been small. Palm oil, European rapeseed, soybeans and soy
meal are firmer this morning, but soy oil is mixed. The Canadian dollar is
up about a tenth of a cent against the U.S. dollar. Trading could be choppy
today ahead of the long weekend in the U.S. Canola will have normal trading
hours, but U.S. markets will close for the Martin Luther King Jr. holiday.

BULL SIDE                               BEAR SIDE
1) Hot and dry weather in parts of      1) The South American soy crop may
Brazil and excess moisture in parts of  not be as large as had been
Argentina continue to raise concerns    expected, but it is still large,
that the South American soy crop will   and early harvested supply is about
be significantly smaller than was       to come onto the market.
previously expected.                    2) After two days of solid gains, 
2) Canola extended its bounce           canola looks vulnerable to profit 
yesterday, posting solid gains for the  taking. In addition, prices are 
second day in a row. That shifts the    approaching potential resistance on
short term technical bias to the        the price charts. 
upside.                                 3) Canadian/Chinese tension is 
3) The rally in the Canadian dollar     raising concerns that Chinese 
against the U.S. dollar appears to      buying of Canadian canola could be
have stalled, despite this morning's    curtailed. 
gains.

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