Canola futures fell on Wednesday as farmers priced deliveries and elevator companies hedged their risk.
Soybean oil futures in Chicago also dipped, but soybeans were near steady. Palm oil dipped as traders believe demand from China might be reduced as the Asian giant takes actions to fight inflation.
The oilseed market generally was supported by comments from Eduardo Sierra, a climate adviser for Buenos Aires Grains Exchange, who said La Nina would likely reduce Argentine soy yields by at least 15 percent before starting to fade out in April. He also said there is a growing possibility that another La Nina could rise following this La Nina, bringing with another year of dry weather.
That is what happened in 2008-09 and it reduced Argentine corn yields by 40 percent and soy yields by 33 percent.
He said the likelihood of back to back La Ninas was about 50-50.
Brazil’s crop areas remain well supplied with moisture.
Wheat prices were more stable on Wednesday after falling sharply on Tuesday on forecasts of drier weather in eastern Australia, allowing harvest to resume.
Brett Cooper, senior manager for markets at FCStone Australia, told Reuters News Service that the amount of wheat said to be downgraded to feed was being blown out of proportion.
Most news reports from Australia talk about 50 to 60 percent of the wheat crop downgraded to feed. But Cooper said that is “far too high.”
He said a lot of wheat would be damaged but not fall into the feed category. He also said blending could upgrade some wheat.
In Winnipeg, the January canola contract fell $5.30 to $558.80 per tonne on 9,087 trades.
The March contract fell $5.20 to $567.40 on 13,438 trades.
The November 2011 contract fell $3 to $509.80.
The previous day’s best basis narrowed to $20.63 under the nearby contract.
The January contract 14-day Relative Strength Index was 58.
The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
March barley futures were steady at $194. December expired.
Chicago January soybeans rose 0.5 cents to $12.965 US per bushel.
March corn fell three cents to $5.8425.
March oats fell 1.5 cents to $3.835 per bu.
March Minneapolis hard spring wheat fell 0.75 cents to $8.4275 per bu.
In New York, crude oil for January delivery rose 34 cents to $88.62 US per barrel.
The Canadian dollar at noon was 99.65 cents US, up a little from 99.59 cents the previous trading day. The U.S. dollar at noon was $1.0035 Cdn.
The TSX composite index fell 51.01 points to close at 13,229.07.
The Standard & Poor’s 500 fell 6.04 points to 1,235.55.
U.S. industrial production rose at its fastest pace in four months in November, implying a self-sustaining recovery is now entrenched.
