China backed away from a deal to buy 540,000 tonnes of U.S. soybeans today, which pushed futures prices significantly lower and swept canola down in the process.
The market reacted swiftly to the news of the cancelled Chinese order, as March soybean futures lost 26.25 cents to settle at $14.0468. The decline in Chicago soybean futures follows a similar loss yesterday, after forecasts of rain for the Brazilian crop weighed on prices. Over the last two days, March soybean futures have lost more than 55 cents per bu.
Canola losses were moderate in comparison. March canola futures declined $5.70 per tonne, closing at $569.60.
Traders speculated that tight global canola stocks might be propping up canola prices. In its outlook of principal field crops, released Dec. 19, Agriculture Canada noted world production of canola is expected to fall three percent in the 2012-13 crop year to 59 tonnes, based on lower production in Canada and the European Union.
Consumption, though, won’t drop as much as supply, Agriculture Canada noted. Therefore, carryout stocks are estimated to fall 46 percent, which will support canola prices into 2013-14.
Alongside the soybean losses, corn broke through a downside barrier Thursday. March corn futures fell below $7 per bu. to settle at $6.965, the lowest price since July.
Analysts attributed corn’s losses to the fiscal cliff discussions in Washington and end-of-year profit taking. Looking forward, corn futures could return to $8 per bu. in the spring because supplies remain tight.
Following the theme of the day, Minneapolis March wheat futures lost 11.75 cents to settle at $8.8375 per bu. Forecasts of snow and rain in the U.S. plains should aid wheat crops in the region, which had been suffering from a prolonged drought.
Winnipeg (per tonne)
Canola Jan 13 $574.30, down $4.50
Canola Mar 13 $569.60, down $5.70
Canola May 13 $566.60, down $5.50
Canola Jul 13 $564.20, down $4.90
Milling Wheat Mar 13 $290.50, unchanged
Milling Wheat May 13 $293.50, unchanged
Milling Wheat Jul 13 $295.50, unchanged
Durum Wheat Mar 13 $312.40, unchanged
Durum Wheat May 13 $316.40, unchanged
Durum Wheat Jul 13 $319.40, unchanged
Barley Mar 13 $248.00, unchanged
Barley May 13 $249.00, unchanged
Barley Jul 13 $249.50, unchanged
Chicago (per bushel)
Soybeans (P) Jan 13 $14.0875, down 28.25 cents
Soybeans (P) Mar 13 $14.0475, down 26.25
Soybeans (P) May 13 $13.9475, down 24.75
Soybeans (P) Jul 13 $13.905, down 23.5
Corn (P) Mar 13 $6.965, down 6.5 cents
Corn (P) May 13 $6.9975, down 7.25
Corn (P) Jul 13 $6.9725, down 8.5
Oats (P) Mar 13 $3.5975, down 15.5 cents
Oats (P) May 13 $3.6725, down 15.25
Oats (P) Jul 13 $3.6925, down 14.5
Minneapolis (per bushel)
Spring Wheat Mar 13 $8.8375, down 11.75 cents
Spring Wheat May 13 $8.9325, down 11.75
Spring Wheat Jul 13 $9.01, down 10.25
Spring Wheat Sep 13 $8.9875, down 9.0
The Canadian dollar sat at $1.0118 US Thursday, down marginally from $1.0134 the previous day. The U.S. greenback was worth $0.9883 CAN.
Nearby crude oil in New York rose 15 cents to $90.13 per barrel.