Statistics Canada forecast a slightly larger than expected canola crop on Friday triggering another sharp decline in Winnipeg futures.
Weaker soybean futures also contributed to the fall.
StatsCan’s report, based on grower surveys, also forecast larger than expected wheat, barley and pea production.
Several key market watchers, including the Canadian Wheat Board, wonder if the report fully reflected the number of acres that were not seeded or seeded but then drowned out by excess moisture.
On the other hand, some observes believe that generally good weather in August could push the canola yields higher than the StatsCan forecast.
However, that might not be the case for Saskatchewan lentil growers, many of whom are struggling with severe yield-limiting disease.
Other factors weighing on canola were the reduced pace of crush and no new export orders.
The weaker loonie limited canola decline.
The loonie fell again on concerns about signs that the recovery in the Canadian and American economies has stalled.
Russia refuted speculation from the day before that it would need to import several million tonnes of grain from its neighbours. It said the rumours were spread by traders who want to drive prices higher.
In Winnipeg, November canola fell $9.40 per tonne to $439.20 on 22,668 trades.
In the week since last Friday, the November contract fell $23.20 per tonne.
The January contract fell $8.50 on Friday to $443.50 on 2,547 trades.
The previous day’s best basis was $15 per tonne under the November contract in the par region, according to the Winnipeg ICE Futures daily report.
The 14-day Relative Strength Index for November was 34 according to BarChart.com. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
The Canadian dollar at noon was 95.24 cents US, down from 96.16 the previous trading day. The U.S. dollar at noon was $1.050.
Winnipeg October barley was steady at $168. December bid rose $1 to $183. There were no trades
Chicago September soybeans fell 7.5 cents to $10.0925 US per bushel. New-crop November fell 8.25 cents to $10.04. An industry tour of the Midwest estimated corn yield would be less than that forecast by the U.S. Department of Agriculture but soybean yields would be higher.
September oats fell two cents to $2.72 per bu. December oats fell two cents to $2.85 per bu.
In New York, crude oil for September delivery fell 99 cents to $74.43 US per barrel.
The Canadian Oilseed Processors Association said members processed 90,176 tonnes of canola in the week to Aug. 18. That was down 22 percent from the week before and the figure represented only 62 percent of capacity.
So far this crop year, the crush is 272,513, up from 195,808 at the same point last year.
I’ll be on holiday next week so the report will be reduced to just the prices.
