Tuesday was an ugly day in the grain markets. Everything dropped sharply, mostly limit down. Canola futures were down $30 a tonne. From the peak just a short time ago, canola is down $50 or $60 a tonne.

The drop yesterday was counterintuitive, because crude oil prices went up sharply. Generally, when oil increases, grain prices follow. In this case, it seems the political turmoil in Libya is pushing oil higher, but investors are reducing their risk and selling off commodities. While this sort of volatility in grain prices seems dramatic, we’ve seen it before. In early 2008, canola futures hit nearly $750 a tonne. Within a few months, the price had dropped to under $550. By the middle of 2008, canola futures had worked their way back up to nearly $700 a tonne, only to collapse to less than $400 by the end of the year. By comparison, the recent move from around $610 down to $550 is just a minor blip. Since last spring, canola prices and the prices for most other grains have been ratcheting higher, but nothing goes up forever. If canola prices can recover from their recent downturn, a lot of producers are likely to look more seriously at locking in some new crop values. I’m Kevin Hursh.