Canola tumbled to a three-year low, leading declines across grains and oilseeds, on signs farmers have harvested a record crop in Canada, the world’s biggest grower. Wheat and soybeans capped weekly losses.
Canola production increased 29 percent to an all-time high of 18 million metric tons, Statistics Canada said Dec. 4. Average yields in Saskatchewan, the largest grower, rose 50 percent to 37.6 bushels an acre, increasing output in the province to a record 8.9 million tons, the government agency said.
The Standard & Poor’s Agriculture Index of eight farm goods plunged 20 percent this year, on pace for the worst rout since 1998. Prices for most agricultural commodities are falling after global grain and oilseed growers sowed more acres and yields improved in the U.S., where fields rebounded from the worst drought since the 1930s. Global food costs tracked by the United Nations tumbled 13 percent from a record in February 2011.
"Canada has a huge crop, North America has a huge crop, the world has a huge crop," John Duvenaud, the publisher of Wild Oats Grain Market Advisory, said in a telephone interview from Winnipeg. "We’ve gone from tight supplies to supplies that are so abundant nobody that can trade grain is worried at all anymore."
Canola futures for January settlement fell 1.9 percent to settle at C$471.90 ($442.68) a ton at 2:03 p.m. on the ICE Futures Exchange in Winnipeg, after touching C$471.10, the lowest for a most-active contract since Oct. 7, 2010. The oilseed declined 20 percent this year.
On the Chicago Board of Trade, wheat futures for March delivery fell 0.2 percent to $6.51 a bushel, capping the first weekly slide since Nov. 8. Prices fell 16 percent this year.
Global inventories before next year’s Northern Hemisphere harvest may reach 179.98 million tons, larger than the U.S. government’s prediction of 178.48 million tons in November, a Bloomberg survey showed. The U.S. Department of Agriculture will update its forecast on Dec. 10.
Soybeans fell on speculation that rain will boost early crop development in South America, reducing demand for U.S. supplies. Widespread precipitation in the next week will eliminate moisture deficits for most of the remaining 15 percent of dry soils in Brazil, Commodity Weather Group LLC said in a report today.
"Markets are on the defensive because weather conditions are conducive for early crop development in South America," Jerry Gidel, the chief feed-grain analyst for Rice Dairy LLC in Chicago, said in a telephone interview. "People are worried that U.S. exports may slow."
Soybean futures for delivery in January retreated 0.2 percent to $13.255 a bushel on the CBOT. The oilseed dropped 0.8 percent this week, the first decline in three weeks.
Corn futures for March delivery gained 0.2 percent to $4.3425 a bushel. The grain tumbled 38 percent this year as the USDA estimates the domestic crop reached an all-time high.