Oilseeds hit a wall on Thursday and dropped sharply with canola posting the largest one-day loss in five weeks.
The U.S. dollar gained against the euro making American agricultural exports more expensive. Weakness in euro zone economies indicates that interest rate hikes are unlikely and that pressured the euro lower. Crude oil prices dropped.
The ongoing harvest of a bumper South American soybean crop also weighed on oilseed prices as did sluggish U.S. soybean weekly exports
Speculation of increased oilseed planting in North America this spring was also negative for prices.
Suporting canola was unconfirmed talk of new business with Pakistan.
March canola futures on Thursday fell $6.20 to $379.50 per tonne on 100 trades. The March contract is in delivery mode and has an open interest of only 155 contracts.
The most active May contract fell $6.90 to $380.80 on 9,100 trades. The previous day’s best basis widened to -$9.75 per tonne off the May contract, according to the Winnipeg ICE Futures daily report. Some crushers are said to have better basis levels than that.
The 14-day Relative Strength Index for May canola was 35. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates over bought.
New crop November fell $6.30 to $393 per tonne on 1,106 trades.
The Canadian dollar at noon Wednesday was 97 cents US, down from 97.21 cents at noon the previous trading day. The U.S. dollar at noon was $1.0309 Cdn.
The lightly traded Winnipeg March barley contract was steady at $141.50 per tonne with no trades. May also was steady at $145.50 on no trades.
March soybeans fell 21.75 cents to $9.325 US per bushel. November soybeans fell 17.5 cents to $9.425 per bu.
March oats settled at $2.19 per bu., down 2.75 cents.
Light crude oil in New York for April delivery settled at $80.21 US per barrel, down 66 cents from the previous close.
Analytical firm Informa Economics raised its estimate of Argentina’s 2009-10 soybean crop by one million tonnes to 55 million. It also raised its corn crop forecast to 21 million tonnes, up 2.8 million from its previous forecast.
It left its estimates of Brazil’s soybean crop unchanged at 66.5 million tonnes and the corn crop at 53.3 million tonnes.
Reuters reported that China has bought more Canadian canola cargoes for shipment though June amid tight supply at home.
Quoting the official China National Grain and Oils Information Centre, it said China loaded four Canadian canola cargoes, or about 200,000 tonnes, in February and about two cargoes each month are scheduled for March to June shipment.
Reuters said Chinese buyers could not confirm new deals but said Beijing had not relaxed its restrictions over imports of Canadian canola containing blackleg disease.
“Most buyers still have worries over imports. But rapeseed supplies are very tight at home,” one official with a rapeseed crusher told Reuters
