North Korea’s artillery barrage on a South Korean island near a disputed border shook traders on Tuesday causing a flight to the relative safety of the U.S. dollar and gold.
Many commodity prices fell, including nearby canola, but Chicago soybeans and corn rose as concern increased about dryness in Argentina’s corn and soybean regions.
Traders continue to debate the impact of China’s inflation fighting policy on its demand for imported soybeans and corn.
Some traders believe Beijing is trying to pressure grain prices lower simply by talking and won’t seriously impede the import of grain.
Oil World said on Tuesday that while crop prices might have a period of weakness leading up to the end of December, the new year will bring stronger prices because the market must encourage increased seeding of corn, oilseeds, wheat and cotton.
In Winnipeg, the January canola contract fell 30 cents to $534.70 per tonne on 8,443 trades.
The March contract fell 50 cents to $540.50 on 2,697 trades.
However, the November 2011 contract rose $1.40 to $496.
The previous day’s best basis was $27.13 under the January contract.
The January contract 14 day Relative Strength Index was 52. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
December barley futures were unchanged at $180 per tonne. March was unchanged at $185.
Chicago January soybeans rose 17.5 cents to $12.39 US per bushel. March also rose 17.5 cents to $12.4625.
December corn rose 13.25 cents to $5.285 per bu.
December oats fell 3.5 cents to $3.475 per bu. March oats fell 3.75 cents to $3.60.
In New York, crude oil for January delivery fell 49 cents to $81.25 US per barrel.
The Canadian dollar at noon was 97.61 cents US, down from 98.16 cents the previous trading day. The U.S. dollar at noon was $1.0245.
Worries about the Korean tensions hit equity markets hard. The TSX composite index fell 135.26 points to close at 12,793.75. The S&P 500 fell 19.05 points to close at 1,178.79.
Mary MacArthur, the Western Producer’s Camrose bureau reporter, is in India gathering stories. See her blog about her travels at www.producer.com.
