New worries about the European debt crisis pressured commodities, including canola, lower on Wednesday.
January canola closed at $502 per tonne, down $4.30.
Losses in canola were limited by a weaker loonie, which was down more than one cent at noon. Limited farmer deliveries are also supporting prices.
Soybeans fell on the stronger U.S. dollar and on falling crude oil prices.
• The bond market showed it believes Europe has not yet developed an adequate response to the debt crisis.
Italy had to pay a record high interest rate today to attract buyers for an issue of five-year bonds.
Worries about the Euro zone pushed investors out of riskier investment like oil and other commodities and into the U.S. dollar.
There are rising expectations that rating agencies will downgrade the credit worthiness of European governments’ debt.
• Investors were also disappointed that the U.S. Federal Reserve on Tuesday gave no indication it was planning more stimulative measures.
• Losses in the oilseed market were limited by worries about increasing dryness in South America.
• Rain and snow this week in the U.S. Plains and Midwest are good news for drought-hit farmers.
• Farmer-elected directors of the Canadian Wheat Board will file an application in Manitoba Court of Queen’s Bench, asking it to rule Bill C-18 invalid because it violates the rule of law.
CWB chair Allen Oberg announced the move at a news conference in Winnipeg Wednesday.
The CWB is also asking the court to issue an order preventing implementation of Bill C-18 until it makes a decision on the validity of the bill.
• Standard Chartered, a British-based bank with most of its operations in Asia and Africa, issued a report on commodities forecasting a general crop price rally in 2012, mostly in the second quarter.
It painted a “darkest before the dawn” picture, saying that China and other Asian importers will in the new year step in to build grain reserves at bargain prices. It also expects there will be a further easing of monetary policy in Europe and the U.S.
Winnipeg (per tonne)
Canola Jan 12 $502.00, down $4.30 (-0.85%)
Canola Mar 12 $502.70, down $4.10 (-0.81%)
Canola May 12 $503.50, down $5.80 (-1.14%)
Canola Jul 12 $505.50, down $6.30 (-1.23%)
The previous days best basis was $6.02 per tonne below the January contract, said ICE Canada Winnipeg.
The January contract’s 14-day Relative Strength Index was 42.
Western Barley Mar 12 $220.00, unchanged
Chicago (per bushel)
Soybeans Jan 12 $11.00, down 18.5 cents (-1.65%)
Soybeans Mar 12 $11.10, down 19.0 (-1.68%)
Soybeans May 12 $11.2075, down 19.0 (-1.67%)
Corn Mar 12 $5.8075, down 13.75 (-2.31%)
Corn May 12 $5.8925, down 14.0 (-2.32%)
Oats Mar 12 $3.0225, down 7.25 (-2.34%)
Oats May 12 $3.0625, down 6.5 (-2.08%)
Minneapolis (per bushel)
Spring Wheat Mar 12 $8.1575, down 14.25 cents (-1.72%)
Spring Wheat May 12 $7.96, down 14.5 (-1.79%)
Spring Wheat Jul 12 $7.885, down 12.75 (-1.59%)
Nearby light crude oil in New York plunged $5.19 to settle at $94.95 a barrel.
The Canadian dollar at noon was down more than one cent at 96.10 cents US, down from 97.24 the previous trading day. The U.S. dollar at noon was $1.0406 Cdn.
The Toronto Stock Exchange composite closed down 216.89 points, or 1.84 percent, to 11,543.05.
The Standard and Poor’s 550 was down 13.91 points, or 1.13 percent, to finish unofficially at 1,211.82.
