Crop futures, including canola, drifted lower on Friday as traders rebalanced their portfolios ahead of next week’s U.S. supply and demand report.
Canola, wheat, soybean, corn and oats all fell in the first week of the year as the Canadian and U.S. dollars gained against other major currencies.
A U.S. employment report for December released Friday found the number of new jobs created was less than expected, however the overall unemployment rate dropped as fewer people were seeking employment.
Currency traders focused on the lower unemployment rate and on renewed worries about debt problems in Europe. This pushed the U.S. dollar higher against the euro and yen.
However the loonie gained on the U.S. buck, supported by a better than expected employment report in Canada. It added 22,000 jobs in December, up from the expected 17,500 forecast. The unemployed rate was steady at 7.6 percent.
The strong loonie is thought to be behind the lack of new canola export business. It is also making domestic processing less profitable.
The weekly crush to Jan. 5 was almost 110,000 tonnes, for a capacity use rate of 75.7 percent.
Investment funds, which have seen strong gains in their agricultural investments over the last year, were taking profits and rebalancing ahead of the Jan. 12 U.S. Department of Agriculture supply and demand report. It will have the first official word on U.S. winter wheat acreage.
In Winnipeg, the January canola contract fell 50 cents to $581.40 per tonne on no trades. The contract is in delivery mode.
Most traded March also fell 50 cents to $586.10 on 7,126 trades. That was down $3.20 from the close Dec. 31.
The November 2011 contract fell 40 cents Friday to $528.50.
The previous day’s best basis was $22 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 64.
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. There are only two contracts in open interest.
Chicago January soybeans fell 11.75 cents to $13.5775 US per bushel. Most traded March fell 13 cents at $13.65.
March corn fell seven cents to $5.95 per bu.
March oats fell seven cents to $3.7075 per bu.
March Minneapolis hard spring wheat fell 15.25 cents to $8.7075 per bu.
In New York, crude oil for February delivery fell 35 cents to $88.3 US per barrel.
The Canadian dollar at noon was $1.0066 US, up from $1.0046 the previous trading day. The U.S. dollar at noon was 99.34 cents Cdn.
The Toronto Stock Exchange composite index ended down 39.37 points to 13,272.30. For the week, the index fell 1.27 percent, weighed down by a weaker resource sector.
Standard & Poor’s 500 Index was off 2.35 points to 1,271.50.
For the week, the S&P 500 rose 1.1 percent.
