Canola followed soybeans down Wednesday on fund selling in advance of Thursday’s USDA supply and demand report and the South American harvest.
Oilseeds are currently the weakest of the major grains due mainly to late season rain that improved South American crop prospects.
Brazil and Argentina are harvesting now, putting new soybeans on the world market. This is reducing the pressure on the U.S. to supply all soybean demand.
The U.S. Department of Agriculture’s monthly supply and demand report on Thursday is expected to increase the estimate of year end American soybean stocks as buyers switch to South American supply. USDA could also increase its estimate of the Brazilian crop.
The strong Canadian dollar is also weighing on canola prices.
Weak soybeans are also dragging down corn and wheat, although corn is holding on better than other crops.
Announcements earlier this week of new wheat sales to Iran and Lebanon failed to stop the selloff in wheat. The failure to rally on bullish news caused further selling. Chicago wheat is down 8.8 percent this week.
High oil prices are adding to the negative pressure on grain, with investors concerned that expensive oil will sap the strength of the global economy.
Ukraine’s rapeseed harvest will probably expand by about 500,000 tonnes this year because farmers increased acreage and more of the crop survived winter weather, according to UkrAgroConsult.
The harvest will probably increase to 2.06 million tonnes this year from 1.47 million in 2010, Bloomberg reported, quoting an UkrAgroConsult report.
April live cattle futures posted a record high today on a shortage of market ready cattle and strong beef exports.
Winnipeg
Canola Mar 11 $567.40 a tonne, down $13.90
Canola May 11 $571.50, down $13.90
Canola Jul 11 $578.50, down $13.90
Canola Nov 11 $551.50, down $11.60
The previous day’s best basis was steady at $27 under the May contract according to ICE Futures Canada in Winnipeg.
The May contract 14-day Relative Strength Index was 40. 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 a tonne, unchanged
Chicago
Soybeans Mar 11 $13.44, down 31.5 cents
Soybeans May 11 $13.49, down 33 cents
Soybeans Nov 11 $13.20, down 26 cents
Corn Mar 11 6.95, down 3.75 cents
Corn May 11 7.01, down 4.5 cents
Oats Mar 11 $3.62, down 6.5 cents
Oats May 11 $3.67, down 8 cents
Minneapolis
Spring Wheat Mar 11 $8.92, down 20 cents
Spring Wheat May 11 $9.0375, down 18.5 cents
Spring Wheat Dec 11 $9.1475, down 13.75 cents
Light crude oil at New York fell 64 cents per barrel to $104.38 for the nearby contract.
The Canadian dollar at noon was $1.0324 US, up from $1.0295 the previous trading day. The U.S. dollar at noon was 96.86 cents Cdn.
The Toronto Stock Exchange composite index fell 128.26 points to 13,884.71.
The Standard & Poor’s 500 Index fell 1.8 points to 1,320.02.
