Crop prices fell Monday on a forecast of larger than expected U.S. seeding.
Canola dropped 2.3 percent, the biggest fall in months, as funds sold heavily. A number of short term technical indicators turned negative, adding to selling pressure.
The U.S. Department of Agriculture today released preliminary forecasts for 2011 seeding that were larger than expected and pressured grain prices lower.
The forecast was the USDA’s baseline projection using models based on late 2010 prices. The first official acreage forecast based on surveys comes out in March.
USDA said American farmers would sow an additional 10.1 million acres this year.
It pegged corn area at 92 million, up four percent. Soybeans would be seeded on 78 million acres, up one percent and wheat on 57 million, up 6.3 percent.
Normally this preliminary forecast would have minimal impact, but there was little other news to trade on.
Also pressuring oilseeds was the belief that Brazil will have a bumper soybean crop. Also, rain in Argentina has stopped yield losses there. Harvest is about 10 percent complete in Brazil.
Lower crude oil prices also weighed on oilseeds and corn.
After the market closed, the Australian Bureau of Agricultural and Resource Economics and Sciences released updated estimates of its crop, reflecting damage caused by flooding.
It lowered its wheat production estimate to 26.33 million tonnes from 26.82 million tonnes in December. It lower the barley production figure to 9.33 million tonnes from 9.81 million. Canola increased to 2.14 million tonnes from 2.05 million.
ABARES kept its wheat export forecast unchanged at 16 million tonnes but slightly reduced the barley export projection and increased the canola export number.
In Winnipeg, March canola fell $13.70 to $586.80 per tonne on 16,423 trades.
May fell $13.80 to $595.30 on 10,875 trades.
The new crop November 2011 contract fell $9 to $582.50.
The previous day’s best basis was $15.90 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 41. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
March barley futures were steady and untraded at $194. May and July were $205.
Chicago March soybeans fell 13.25 cents to $14.0275 per bushel.
March corn fell 10.75 cents to $6.9575 per bu.
March oats fell six cents to $4.12 per bu.
March Minneapolis hard spring wheat fell 4.75 cents to $10.13 per bu. New crop December fell five cents to $10.3025. Chicago wheat markets edged higher on worries about the hard red wheat crops in China and the U.S.
In New York, crude oil for March delivery fell 77 cents to $84.81 US per barrel.
The Canadian dollar at noon was $1.0116 US, up from $1.0098 the previous trading day. The U.S. dollar at noon was 98.85 cents Cdn.
Stock markets surged on a report from China showing higher than expected imports, which narrowed its trade surplus.
The Toronto Stock Exchange composite index rose 144.01 points to 13,910.77.
The Standard & Poor’s 500 index rose 3.15 points to 1,332.30.
