However many people James Comy, the former FBI director, has
annoyed, he looks a friend to agricultural commodity bulls.
At least, the rumpus following his dismissal by Donald
Trump, the US president, has done damage to the dollar which has boosted the appeal of exports denominated in the currency,
making them more affordable to foreign buyers.
The greenback fell below 98 against a basket of currencies
at one point in early deals on Wednesday, its lowest since Mr Trump's election
six months ago, and down more than 5% from "Trump bump" highs reached early in
The dollar's depreciation fuelled a firm start for US-traded
agricultural commodity futures, which showed widespread gains.
'Slowed the flow'
OK, for soybeans, the currency has been higher profile - or
at least, the strength of the Brazilian real
against the dollar has.
This cuts the value in Brazil of assets traded in dollars,
and has dissuaded many producers in the South American from selling crop, in
hope of a currency reversal, and higher soy values ahead.
"The Brazilian real's rise has, by cutting domestic prices,
slowed the flow of Brazilian soybeans to the market," said Tobin Gorey at Commonwealth
Bank of Australia.
"Just for good measure, Brazil's customs officers are on
strike for the next few days" too, in another small plus for bulls.
'Lacking in sellers'
Benson Quinn Commodities said: "The market seems to be
lacking in sellers, with commercial owning most of the soybeans in the US while
the Brazilian farmer sits on the sidelines."
Meanwhile, on the demand side, the broker flagged "talk about
new sales to China this week" – speculation which gained some support when the
US Department of Agriculture on Tuesday unveiled the sales of 132,000 tonnes of
soybeans to an unknown import destination.
Soybean futures for July edged 0.2% higher to $9.78 ½ a
bushel as of 09:20 UK time (03:20 Chicago time), crossing back above their 50-day moving average for only a second
session in the past two months.
Soyoil for July
added 0.6% to 33.20 cents a pound, helped by continued anticipation of the US
imposing stiff duties on imports of biodiesel (which is made from vegetable
oils) from Argentina and Indonesia.
The gains helped palm oil too return to winning ways, with
the August contract adding 0.4% to 2,621 ringgit a tonne in Kuala Lumpur.
Vegetable oil values were firm overnight on China's Dalian
exchange too, with palm oil for September edging 0.4% higher to 5,514 yuan a
Back in Chicago, corn
managed a 0.2% gain to $3.68 ½ a bushel for July delivery, before hitting turbulence
as it tried to head above a cluster of moving averages, including the 40-day
Weather seems OK but not great for the last chapters of spring
sowings, with Benson Quinn Commodities flagging forecast in the eastern Corn
Belt "for a warmer drier week that should allow for planting progress", but
noting showers north and west.
"This weekend looks to offer below-normal temperatures with
50s to 60s Fahrenheit for a high," the broker added.
Meanwhile, rain has reemerged as an issue in Argentina too,
with the potential for heavy rains where on Thursday and Friday, disrupting
harvesting and perhaps damaging ripe crops.
"This should be monitored," advised Terry Reilly at Futures
International, especially given that "several private entities have recently
upward revised Argentina's soybean, corn crops".
Michael Cordonnier earlier this week raised his forecasts
for the Argentine corn crop by 2.0m tonnes to 39.0m tonnes.
Still, it was wheat
which performed best of Chicago's big three, for once, adding 0.5% in Chicago
to $4.26 ¼ a bushel.
The grain was helped, on the demand side, by a tender for
wheat by Egypt's Gasc grain authority, which many observers thought had done
its purchases for 2016-17, and was now to rely on stocks and supplies from the
domestic harvest for a while.
Results of the tender will be known later, offering an
interesting insight into the state of cash markets, and the relative competitiveness
of different origins.
Meanwhile, there remains some concern that investors may be
underestimating the damage done to US winter wheat from the snows and winds a
couple of weeks ago.
OK, the weekly USDA crop progress data on Monday did not
show a big drop in ratings, including in Kansas, the top wheat-growing state,
which bore the brunt of the weather.
"Traders may have seen this as a positive sign there was
little damage done to the winter wheat crop in western Kansas," said Terry
Reilly at Futures International.
"But we think it will
take a little more time for the damage to surface.
'Sets the stage for
At RJ O'Brien, Richard Feltes said that weaker-than-expected
yields "won't be apparent until mid-June", ie when harvest is ramping up.
"The unusual nature of the hard red winter wheat growing
season - dry early, mid-winter soaker, above-normal spring temperatures, heavy
early-May snow, ample late-May precipitation, elevated foliar disease -
heightens uncertainty over final yields," he said
In so doing, it "sets
the stage for surprises as harvest accelerates mid-June".
'Treacherous price spikes'
Price rises were also evident in New York cotton, which for July rebounded 0.4%
to 81.64 cents a pound – despite closing the last session limit-down, implying
unfulfilled selling, after the surge of the previous three session.
Tuesday's tumble "might signal that the squeeze has been
somehow resolved. Or it might not," said CBA's Tobin Gorey.
"Spikes of this type are made treacherous because they do
not always happen in a straight sequence of days – they are plenty volatile."