Crop prices fell again on Tuesday as investors worried unrest in oil-rich countries causing high oil prices could derail global economic growth.
Oilseeds were also pressured by expectations of a bumper crop in Brazil and a better than expected crop in Argentina.
Also, oilseeds were under pressure because traders believe the U.S. Department will increase its forecast of year end soybean stocks. In the previous 11 USDA reports, it has reduced its stocks forecast.
The USDA reports on Thursday.
Canola traders are consumed over the question of how many acres will be seeded in Western Canada this spring. Growers want to increase acreage, but conditions might be too wet to allow them to.
An analyst at a conference on palm oil markets forecast a sharp downward correction in the vegetable oil in the second half of the year. The palm oil, soybean and canola markets are closely related.
Chris De Lavigne, of research and consulting firm Frost & Sullivan, said high prices would likely continue for a few months, but they are unsustainable over the long term and will kill demand. He thinks palm prices could fall by 30 percent by year end.
Other analysts said palm oil production in Indonesia and Malaysia would increase in the second half of the year as the trees fully recover from the last El Nino that caused drought that slowed growth.
On the other hand, the Malaysian government is encouraging the growth of palm-based biofuel.
Wheat prices also fell, pressured by rain that fell in the U.S. hard red winter wheat region. However, the moisture was less than hoped for, mostly less than seven millimeters.
Slightly larger amounts fell in a belt from south central Kansas to north central Oklahoma.
Winnipeg
Canola Mar 11 $581.30 per tonne, down $7.20
Canola May 11 $585.40, down $7.20
Canola Jul 11 $592.40, down $7.10
Canola Nov 11 $563.10, down $8.70
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 46. 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 per tonne, unchanged
Chicago
Soybeans Mar 11 $13.755, down 12.25 cents
Soybeans May 11 $13.82, down 13 cents
Soybeans Nov 11 $13.46, down 8.75 cents
Corn Mar 11 $6.9875, down 12 cents
Corn May 11 $7.055, down 12 cents
Oats Mar 11 $3.685, down 10 cents
Oats May 11 $3.75, down 11 cents
Minneapolis
Spring Wheat Mar 11 $9.12, down 28.5 cents
Spring Wheat May 11 $9.2225, down 21.5 cents
Spring Wheat Dec 11 $9.285, down 18.5 cents
Light crude oil at New York fell 42 cents per barrel to $105.02 for the nearby contract. Kuwait’s oil minister said the Organization of Petroleum Producing Countries was considering boosting production for the first time in two years to limit crude oil price gains.
The Canadian dollar at noon was $1.0295 US, little changed from $1.0269 the previous trading day. The U.S. dollar at noon was 97.13 cents Cdn.
The Toronto Stock Exchange composite index fell 79.38 points to 14,012.97.
The Standard & Poor’s 500 Index rose 11.69 points to 1,321.82.
