Corn dropped sharply on Thursday, dragging down other crop futures including canola.
January canola closed at $521.80, down $5.00 or 0.95 percent.
Weekly U.S. corn exports fell from the already low level set the week before to a new 13-month low. Feed importers are meeting their needs by buying plentiful feed wheat or importing lower price corn from Ukraine. Australia still has large supplies of feed wheat from last year’s rain-soaked harvest.
Grain futures were also pressured lower by worries about the spreading euro-zone debt crisis. Risk aversion generally pushed commodities lower as traders worry that Europe’s problems will lead to lower demand. The market is also getting nervous about what appears to be lack of progress by the U.S. supercommittee of congressmen charged with cutting the U.S. deficit.
The drop in corn hit oats futures particularly hard today with prices falling more than five percent.
Oilseeds fell less than corn thanks to residual support from new soybean exports to China, which were confirmed in today’s weekly export numbers from the USDA.
Canola held on better than soybeans, thanks to steady crusher demand and talk of export activity.
Chicago wheat fell hard today along with corn and on weaker than expected exports. But Minneapolis held up better because of the relative shortage of high protein wheat.
• News that Europe was unable to increase the area of its fall seeded winter canola crop should support prices for the 2012 crop.
Strategie Grains said farmers had intended to increase acres to make up for production shortfalls this past season. However, acreage actually dropped three percent because of weather difficulties at planting time.
The short crop this year has caused Europe to increase imports, mainly from Ukraine and Russia although there are hopes more Canadian seed or oil will go to Europe this crop year.
• Forecasts for Argentina’s 2011-12 wheat crop, now being harvested, are all over the map. Today the Buenos Aires Grain Exchange increased its forecast to 13 million tonnes, from its previous forecast for 12.6 million tonnes, but the Rosario exchange last week lowered its estimate to 12.4 million from 12.5 previously. The lowest estimate came from the government today. It dropped its outlook to 12 million tonnes from 12.5 million previously.
Winnipeg (per tonne)
Canola Jan 12 $521.80, down $5.00 (-0.95%)
Canola Mar 12 $527.80, down $6.10 (-1.14%)
Canola May 12 $530.80, down $7.20 (-1.34%)
Canola Jul 12 $536.60, down $7.70 (-1.41%)
The previous day’s best basis was $10 under the January contract.
The November contract’s 14-day Relative Strength Index was 42.
Western Barley Dec 11 $217.00, unchanged
Chicago (per bushel)
Soybeans Jan 12 $11.6825, down 19.5 cents (-1.64%)
Soybeans Mar 12 $11.785, down 19.5 (-1.63%)
Soybeans May 12 $11.88, down 19.75 (-1.64%)
Corn Dec 11 $6.145, down 28.25 (-4.40%)
Corn Mar 12 $6.2325, down 28.75 (-4.41%)
Oats Dec 11 $3.00, down 18.0 (-5.66%)
Oats Mar 12 $3.05, down 18.5 (-5.72%)
Minneapolis (per bushel)
Spring Wheat Dec 11 $9.25, down 8.5 cents (-0.91%)
Spring Wheat Mar 12 $8.815, down 8.5 (-0.96%)
Spring Wheat May 12 $8.50, down 8.25 (-0.96%)
Light crude oil nearby futures in New York lost all of yesterday’s gains, dropping $3.77 to $98.82 US per barrel.
The Canadian dollar at noon was 97.79 cents US, down slightly from 97.98 the previous trading day. The U.S. dollar at noon was $1.0226 Cdn.
The Toronto Stock Exchange composite closed down 258.93 points, or 2.13 percent at 11.915.43.
The S&P 500 closed down 20.54 points, or 1.66 percent, at 1,216.37.
