Weak global economy pressures canola lower

Canola dropped to a two-week low Tuesday on outside influences as commodities generally fell amid worries about the U.S. and European economies.Grain, oil and metals dropped based on a report showing a sharp drop in U.S. consumer confidence and renewed worries over euro zone finances. Strikes and demonstration were held in Greece and Spain over austerity measures that governments are imposing such as civil servant salary and pension cuts. Euro zone banks face a deadline this week to pay back a giant European central bank one-year loan.Also, a sharp downward correction in China’s leading economic indicator for April contributed to the worries.Investors are also concerned that a report on U.S. employment due Friday will show large job losses as people hired to do the U.S. federal census last month were laid off.U.S. crop markets were lower on good weather and expectations of large crops. The U.S. Department of Agriculture releases its seeded acreage and grain stocks reports tomorrow morning.The weaker oil price pressured the Canadian dollar lower, but that did not prevent canola closing lower.In Winnipeg, July canola fell $3.50 per tonne Tuesday to $431.40 on 773 trades. The July contract will move into delivery mode July 2 and expires July 14.The previous day’s best basis was $12 per tonne off the July contract in the par region, according to the Winnipeg ICE Futures daily report.New crop November canola, the most traded contract, fell $4.60 per tonne to $414.30 on 8,215 trades. The 14-day Relative Strength Index for July canola was 74, according to BarChart.com. The 14-day RSI for November was 65. The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicate over bought.The Canadian dollar at noon was 94.98 cents US, down from 96.74 cents at noon the previous trading day. The U.S. dollar at noon was $1.0529 Can.Winnipeg barley was untraded. July raised $8 per tonne to $163. October was $150.40. December was $150.40.Chicago July soybeans fell 7.5 cents to $9.4725 US per bushel; new-crop November fell 6.5 cents to $9.12.July oats fell 13 cents to $2.485 per bu. December oats fell 9.5 cents to $2.53 per bu. Corn was pressured lower by expectations of a bumper crop in the United States.In New York, crude oil for July delivery fell $2.31 to $75.94 per barrel.

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