Canola Falls on Upset About Greek Referendum Talk and Rapid South American Seeding
November 02, 2011
Rising worries about European debt drove the U.S. dollar higher and pushed commodities, including canola, lower.
Wheat and corn rallied late on bargain buying, but oilseeds posted losses. Soybeans are facing downward pressure from the rapid seeding progress in Brazil and Argentina. Traders believe the early start will mean an early harvest, shrinking the amount of time when U.S. soybeans dominate the market.
Canola's fall was limited by an almost two cent decline in the loonie. Most of the volume is in the January canola contract.
November canola closed at $522.70 per tonne, down 80 cents or 0.15 percent. January closed at $525.70, down $3.80 or 0.72 percent.
Markets generally reacted negatively to a decision of Greek prime minister George Papandreou to hold a referendum on the country's debt bailout agreed to only days ago.
Ruling party lawmakers revolted against the prime minister, demanding his resignation.
The turmoil sent investors running to the relative safety of the U.S. dollar.
The leaders of Germany and France called prime minister Papandreou to a crisis meting in Cannes, France on Wednesday.
Grain markets were also pressured lower by the fallout from the bankruptcy of commodity trader MF Global.
Winnipeg (per tonne)
Canola Nov 11 $522.70, down $0.80 (-0.15%)
Canola Jan 12 $525.70, down $3.80 (-0.72%)
Canola Mar 12 $533.10, down $4.50 (-0.84%)
Canola May 12 $537.60, down $2.80 (-0.52%)
The previous day's best basis narrowed to $9 under the November contract, according to ICE Futures Canada in Winnipeg.
The November contract's 14-day Relative Strength Index was 42. The rule of thumb is an RSI of 30 indicates an over sold and 70 is over bought.
Western Barley Dec 11 $216, fect unchanged
Chicago (per bushel)
Soybeans Nov 11 $11.9225, down 15.25 cents (-1.26%)
Soybeans Jan 12 $12.025, down 14.75 (-1.21%)
Soybeans Mar 12 $12.12, down 15.0 (-1.22%)
Corn Dec 11 $6.54-2, up 7.25 (+1.12%)
Corn Mar 12 $6.65-2, up 6.25 (+0.95%)
Oats Dec 11 $3.35-0, up 0.5 (+0.15%)
Oats Mar 12 $3.44-4, down 0.5 (-0.14%)
Minneapolis (per bushel)
Spring Wheat Dec 11 $9.0575, down 3.0 cents (-0.33%)
Spring Wheat Mar 12 $8.6275, up 2.75 (+0.32%)
Spring Wheat May 12 $8.4375, up 6.75 (+0.81%)
Light crude oil nearby futures in New York fell $1 to $92.19 US per barrel.
The Canadian dollar at noon dropped below par to 98.06 cents US, down from $1.0065 the previous trading day. The U.S. dollar at noon was $1.0198 Cdn.
In a preliminary tally, the Toronto Stock Exchange composite index closed down 136.96 points, or 1.1 percent, at 12,115.10.
The Standard & Poor's 500 Index was down 34.96 points, or 2.79 percent, at 1,218.34.
By D'Arce McMillan, Saskatoon newsroom
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