Oilseed futures fell on Tuesday on South American weather and on investment funds activity.
Initially crop markets rose on hot, dry weather in Argentina and southern Brazil that is damaging yield prospects for soybeans and corn.
But oilseeds later retreated to a loss on a forecast for rain next week that could revive Argentina’s soybeans. Most of Brazil has enjoyed good growing weather.
A Reuters News survey shows forecasts for Argentina’s soybean crop range from 40 to 52 million tonnes, compared to last year’s 54.5 million tonnes. The forecasts for Brazil range from 67 to 69.5 million tonnes, compared to 69 million last year.
Prices were also weakened when investment funds sold contracts to rebalance portfolios.
The strong Canadian dollar is weighing on canola futures.
The market on Wednesday will trade on information in the United States Department of Agriculture monthly supply and demand report.
The report is expected to reduce the outlook for year end corn stocks and also show that U.S. farmers seeded more acres to winter wheat last fall.
More rain in eastern Australia added to that country’s problems with wheat quality and logistics.
A cold snap in Kansas this week might add stress to the hard red winter wheat crop.
In Winnipeg, most traded March canola fell $4.30 to $588.80 on 9,216 trades.
The January canola contract fell $6.10 to $582.30 per tonne on 423 trades. The contract expires Jan. 14.
The November 2011 contract rose 20 cents to $545.
The previous day’s best basis was $22 under the March contract according to ICE Futures Canada in Winnipeg.
The March contract 14-day Relative Strength Index was 65
The rule of thumb is an RSI of 30 indicates an over sold market and 70 indicates an over bought market.
March barley futures were steady at $194. There are only two contracts in open interest.
Chicago January soybeans fell 22.75 cents to $13.505 US per bushel. Most traded March fell 23.5 cents to $13.57.
March corn was unchanged at $6.07 per bu.
March oats rose 2.5 cents to $3.82 per bu.
March Minneapolis hard spring wheat was unchanged at $8.6525 per bu.
In New York, crude oil for February delivery rose $1.86 to $91.11 US per barrel.
The Canadian dollar at noon was $1.0098 US, up from $1.0076 the previous trading day. The U.S. dollar at noon was 99.03 cents Cdn.
The Toronto Stock Exchange composite index ended up 155.93 points to 13,401.05. Energy company shares rose when the U.S. Energy Information Administration raised its forecasts for 2011 and 2012. It estimates that oil will average $93 US a barrel this year and rise to $99 a barrel next year.
Standard & Poor’s 500 Index was up 4.73 points to 1,274.48.
Several American retailers announced either strong quarterly sales or forecasts for increased sales.
