Canola falls on prospect of big S. American soy crop and economic problems

Canola and most crop futures closed lower on Thursday, pressured by concerns about the battle over the looming U.S. fiscal crisis and by indications that South American soybean production will be large

January canola closed at $580.50, down $4.10.

March closed at $578.50, down $4.40.

Soybean futures were under lingering pressure from last week’s bearish USDA report that increased the estimate of the U.S. soybean crop and by generally favourable growing conditions in Brazil.

Argentina’s farmers are struggling to seed their soybean crop after weeks of excessive rain. Recent drier weather is helping though and the government today forecast that farmers will seed four percent more land to the oilseed.

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Worries about the ability of American politicians to address the fiscal cliff kepts markets generally on edge, as did the new violence in Israel and Gaza.

Disappointing weekly employment and factory activity data shows Hurricane Sandy dealt a blow to the U.S. economy. Also, data shows the European Union has fallen back into recession.

Vegetable oil prices were supported by the strong run up on Wednesday of palm oil prices, supported by improved Malaysian exports and expectations of improved demand.

• Wheat was supported by word from Egypt that it will likely not be able to buy from Ukraine in the new year due to short supply and will have to source product from Europe, North America, Australia and Argentina.

• Reuters reports that Ukraine says its winter wheat crop is in near perfect condition as it goes into dormancy, but Russia’s outlook is unclear, although the crop is expected to improve overall from last year’s crop.

• Reuters quotes Sterling Smith, futures specialist with Citigroup, as saying that U.S. corn exports, which have been dreadful, might pick up early in the new year as South America and the Black Sea region run low on exportable supply.

Winnipeg (per tonne)

Canola Jan 13 $580.50, down $4.10 -0.70%

Canola Mar 13 $578.50, down $4.40 -0.75%

Canola May 13 $576.90, down $4.40 -0.76%

Canola Jul 13 $573.70, down $4.50 -0.78%

Milling Wheat Dec 12 $307.00, unchanged

Milling Wheat Mar 13 $316.50, unchanged

Milling Wheat May 13 $319.50, unchanged

Durum Wheat Dec 12 $312.40, unchanged

Durum Wheat Mar 13 $319.00, unchanged

Durum Wheat May 13 $323.00, unchanged

Barley Dec 12 $250.00, unchanged

Barley Mar 13 $253.00, unchanged

Barley May 13 $254.00, unchanged

Chicago (per bushel)

Soybeans (P) Jan 13 $14.02-0, down 17.0 -1.20%

Soybeans (P) Mar 13 $13.84-0, down 14.75 -1.05%

Soybeans (P) May 13 $13.62-2, down 15.0 -1.09%

Soybeans (P) Jul 13 $13.54-4, down 11.75 -0.86%

Corn (P) Dec 12 $7.2125, down 4.5 -0.62%

Corn (P) Mar 13 $7.25, down 4.25 -0.58%

Corn (P) May 13 $7.2025, down 4.75 -0.66%

Oats (P) Dec 12 $3.645, down 3.0 -0.82%

Oats (P) Mar 13 $3.74, down 2.5 -0.66%

Oats (P) May 13 $3.7525, down 2.0 -0.53%

Minneapolis (per bushel)

Spring Wheat Dec 12 $9.2025, down 3.25 -0.35%

Spring Wheat Mar 13 $9.3075, down 2.5 -0.27%

Spring Wheat May 13 $9.3775, down 2.75 -0.29%

Spring Wheat Jul 13 $9.38, down 2.75 -0.29%

Crude oil in New York fell to $85.45, down 87 cents.

The Bank of Canada noon rate for the loonie was 99.75 cents US, down from 99.82 the day before.

The U.S. dollar was $1.0025 Cdn.

In early tallies:

The Toronto Stock Exchange’s S&P/TSX composite index unofficially ended down 118.41 points, or 0.99 percent, at 11,811.38, putting the TSX down 1.2 percent for the year.

The Dow Jones industrial average fell 29.49 points, or 0.23 percent, to close at 12,541.46.

The Standard & Poor’s 500 Index was down 2.26 points, or 0.17 percent, at 1,353.23.

The Nasdaq Composite Index closed down 9.87 points, or 0.35 percent, at 2,836.94.