Poor weekly U.S. soybean exports and worries that inflation in China will force Beijing to slow the economy forced soybean prices sharply lower Thursday.
Winnipeg canola futures also fell.
China cancelled a net 192,000 tonnes of old crop U.S. soybeans last week. The result was the worst week for soybean export sales in eight years.
The soybean harvest in Brazil is one-third complete and China is expected to buy the bulk of its needs for the rest of the year from South America, where prices are lower because of a record crop.
China’s consumer inflation jumped to a 16-month high in February, prompting many to speculate that the government will pull back from stimulus measures and tighten money supply to stop the economy from overheating.
If China does tap the brake, it could slow its demand for commodities, including oilseeds.
Agriculture Canada published its latest supply and demand tables, including the department’s forecasts for 2010 production. Statistics Canada’s survey of seeding intentions will be published April 26.
Agriculture Canada sees Canadian farmers seeding a record canola crop of 16.8 million acres, up three percent.
However, its yield forecast of 31 bushels an acre was based on historical trends and not the strong yields of the past two years, which topped 34.5 bu. per acre. It forecast a canola crop of 11.6 million tonnes, down from 11.825 last year and the record 12.64 million two years ago.
Using last year’s yield would produce a new record crop of 12.96 million tonnes.
The department forecast a 2.9 percent decrease in all wheat acreage. Durum area would drop by 25 percent from last year, flax by 28 percent and barley by three percent.
Oat seeding would increase by 17.5 percent.
Dry pea area would be about steady, but lentils would increase by 22 percent.
March canola futures fell $4.80 to $383.60 per tonne on no trades Thursday. The March contract is in delivery mode and there is no open interest. It expires Friday.
The most active May contract fell $4.80 to $382.60 on 5,357 trades. The previous day’s best basis was steady at -$7.75 per tonne off the May contract in the par region, according to the Winnipeg ICE Futures daily report.
The 14-day Relative Strength Index for May canola was 35, according to BarChart.com. The rule of thumb is an RSI of 30 indicates an oversold market and 70 indicates overbought.
New crop November fell $5.20 to $391.80 per tonne on 852 trades.
The Canadian dollar at noon was 97.42 cents US, down from 97.63 cents at noon the previous trading day. The U.S. dollar at noon was $1.0265 Cdn.
The lightly traded Winnipeg March barley contract was steady at $150 per tonne with no trades. May was steady at $154 on no trades.
May soybeans fell 27.5 cents US to $9.305 per bushel. November soybeans fell 18.75 cents to $9.165 per bu.
March oats fell 1.5 cents to 2.115 per bu.
Light crude oil for April delivery rose two cents to $82.11 per barrel.
