Traders spooked by the violent revolt in Libya backed out of crop futures Tuesday and crowded into “safe haven” investments.
Most canola contracts fell the daily limit ($30 per tonne) as did Chicago wheat (60 cents per bushel), corn (30 cents per bu.) and soybeans (70 cents per bu.).
The Chicago exchange will expand the daily limits beginning with the overnight session. The new limits will be 90 cents for wheat, 45 cents for corn, $1.05 for soybeans, 3.5 cents for soyoil, 75 cents for rough rice, and 30 cents for oats.
Traders were also jittery about the U.S. Department of Agriculture Outlook Conference later this week and the potential for higher than expected acreage projections.
A Reuters poll of analysts put the U.S. soybean acreage at 77.85 million acres, with a range of 77 to 78.5 million.
Last year U.S. farmers seeded 77.4 million.
The poll put the average corn area at 91.528 million acres with a range of 90.5 to 93 million.
Last year they seeded 88.2 million.
Weather remains good in South America. Oil World today forecast Brazil’s soybean crop at 72 million tonnes, up from 68.6 million last year.
Oilseeds were also weakened by China’s failure to drop tariffs on soybeans and soy oil as had been forecast.
Unlike Egypt and Tunisia, Libya is a major oil producer and the revolution there, which is being met with violent opposition from dictator Muammar Gaddafi, is causing a lot of worries in financial and commodity markets. Traders fear the revolutions popping up every few days in the Middle East have the potential to escalate into something bigger that could disrupt oil shipments.
Oil jumped higher, and in early overnight trading crop markets also gained, but by this morning crop traders were heading for investments that are considered safe, such as U.S. treasury bonds and the Swiss franc. Oil remained strong.
While fear is the word of the day, the sharply lower grain prices could encourage more buying that will further tighten year end stocks.
Winnipeg close
Canola Mar 11 $556.10 per tonne, down $29.80
Canola May 11 $564.10, down $30
Canola Jul 11 $571.70, down $30
Canola Nov 11 $545.50, down $30
The previous day’s best basis was $16.30 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 32. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
Western Barley Mar 11 $194 unchanged
Western Barley May 11 $205 unchanged
Chicago
Soybeans Mar 11 $12.98 US per bushel down 70 cents
Soybeans May 11 $13.11 down 70 cents
Corn Mar 11 $6.7975 per bu. down 30 cents
Corn May 11 $6.9025 down 30 cents
Oats Mar 11 $3.8975 per bu. down 20 cents
Oats May 11 $3.975 down 20 cents
Minneapolis
Spring Wheat Mar 11 $9.0625 per bu. down 49.25 cents
Spring Wheat May 11 $9.1675 down 49.75 cents
Spring Wheat Dec 11 $9.3475 down 49.75 cents
Light crude oil in New York rose $7.37 US per barrel to $93.57.
The Canadian dollar at noon was $1.0143 US, down from $1.0173 the previous trading day. The U.S. dollar at noon was 98.59 cents Cdn.
The Toronto Stock Exchange composite index fell 159.43 points to 13,963.68.
The Standard & Poor’s 500 index fell about 29.27 points to 1,313.74.
