The first data salvo of the day went without too much
That is, Chinese agricultural commodity futures were little
moved by the country's official monthly Casde crop supply and demand report, with
Dalian soybeans for January, for
instance, adding all of 5 yuan to 3,813 yuan a tonne, while corn for January eased 1 yuan to 1,687
yuan a tonne.
Palm oil outperforms
In fact, the Casde raised by 1.78m tonnes, to 212.48m
tonnes, the forecast for China's corn harvest, and by 500,000 tonnes, to 1.5m
tonnes, the forecast for imports of the grain too, with the result being a cut
below 900,000 tonnes in the estimate for the stocks drawdown in 2017-18.
For soybeans, the most notable change was a 1.34m-tonne
upgrade to 94.5m tonnes in the forecast for China's imports in 2017-18, while elsewhere,
the estimate for cotton stocks at the
end of this season was lowered by 400,000 tonnes to 7.06m tonnes – a drop of
21% year on year, and reflecting firm consumption.
Still, Zhengzhou cotton futures for January eased by 0.4% to
15,620 yuan a tonne, easing alongside New York peers, and with Chinese state auctions
seeing a slight reduction in sale rates (to 94.0% on Monday) now trading houses
have been barred.
In fact, palm oil
futures fared better in China, adding 3.1% to 5,642 yuan a tonne for January on
the Dalian, after the boost on Monday from Malaysian stocks data to Kuala
Lumpur prices, which continued to rise in this session.
Kuala Lumpur palm oil
futures for November stood up 0.5% at 2,815 ringgit a tonne as of 09:45 UK time
(03:45 Chicago time), earlier setting a fresh five-month high of 2,827 ringgit a
Still, further data tests await investors on Tuesday, with
Conab poised to unveil monthly data on Brazil's grain and oilseed crops.
Forecasts for US 2017-18 soy data in Wasde and (existing figure)
Harvested area: 88.6752m acres, (88.731m acres)
Range of estimates: 88.2m-89.483m acres
Yield: 48.8 bushels per acre, (49.4 bpa)
Range of estimates: 47.1-49.8 bpa
Production: 4.328bn bushels, (4.381bn bushels)
Range of estimates: 4.179bn-4.417bn bushels
Year-end stocks: 442m bushels, (475m bushels)
Range of estimates: 375m-524m bushels
Year-end stocks, 2016-17: 370m bushels, (370m bushels)
Range of estimates: 331m-477m bushels
Sources: USDA, Reuters
And then there is the main course, at 17:00 UK time, in the
form of the US Department of Agriculture's monthly Wasde briefing on world crop
supply and demand, on which attention will focus in particular on estimates for
and soybean yields.
Investors expect small downgrades to both.
And ideas of an easing in soybean yield prospects gained
some support from the release overnight by the USDA of data showing an easing
of 1 point, to 60%, in the proportion of US soybeans rated "good" or "excellent".
(That said, Wasde estimates will be based in the main on already-completed
'Much more than a
hill o' beans'
"The market is looking for a small cut in yields to reflect
unseasonable weather here and there in the US," said Tobin Gorey at Commonwealth
Bank of Australia.
Forecasts for US 2017-18 corn data in Wasde and (existing figure)
Harvested area: 83.428m acres, (83.496m acres)
Range of estimates: 83.1m-83.5m acres
Yield: 168.2 bushels per acre, (169.5 bpa)
Range of estimates: 166.7-170.9 bpa
Production: 14.035bn bushels, (14.153bn bushels)
Range of estimates: 13.878bn-14.249bn bushels
Year-end stocks: 2.180bn bushels, (2.273bn bushels)
Range of estimates: 1.898bn-2.420bn bushels
Year-end stocks, 2016-17: 2.340bn bushels, (2.370bn bushels)
Range of estimates: 1.964bn-2.380bn bushels
Sources: USDA, Reuters
"Even so the US crop will still be much more than a hill o' beans
Still, Chicago soybean futures for November eased by 0.3% to
$9.57 ½ a bushel for November delivery, with one more positive aspect for
yields ideas that one knock-on effect of Hurricane Irma might be welcome rains
to parts of the Midwest.
"The storm is expected to cause a shift in the overall
weather pattern," said Benson Quinn Commodities.
"It appears this shift will offer better precipitation for
much of the Corn Belt.
"Look for better precipitation in the Northern Plains and
western Corn Belt in the 6-to-10 day forecast."
'Supply will remain
For corn, Mr Gorey's assessment was much the same that "US
Midwest weather has not broadly been a problem but it has been well short of
perfect in some parts.
"In those parts, yields are expected to fall.
"The crop outcome is not though going to be greatly
different. Supply will remain comfortable," if perhaps slightly less
comfortable than had been thought, if traders have called the Wasde changes
Chicago corn futures for December dipped by 0.6% to $3.55 ¼ a
bushel in pre-Wasde positioning, but remain within their trading range this
month, and between the narrowing funnel bounded by 10-day and 20-day moving
averages which has pretty much confined them during this period.
'Has something lower
This time, wheat futures
outperformed in Chicago, in terms of losing a more modest 0.4% to $4.33 ¼ a
bushel for December delivery, but this after bigger losses last time.
Forecasts for 2017-18 wheat output in Wasde, (existing figure)
US year-end stocks: 920m bushels, (933m bushels)
Range of estimates: 875m-943m bushels
World year-end stocks: 264.3m tonnes, (264.69m tonnes)
Range of estimates: 258.0m-268.0m tonnes
Sources: USDA, Reuters
It was not a help that the rouble eased 0.4% to 57.42 to $1,
so making Russian exports a touch more competitive, at a time when the country
has a well-publicised wheat mountain to move.
And in Sydney, east coast wheat futures had a somewhat
disappointing reaction to Abares' downgrade to its Australian crop forecast to
21.6m tonnes, in easing Aus$1.40 to Aus$265.60 a tonne.
"We suspect the market already has something lower in mind,
perhaps even sub-20m tonnes," Mr Gorey said, although adding that "this crop is
going to be harder than usual to guess".
It will be interesting to see any reaction later in Paris
prices, after Egypt confirmed earlier on Tuesday that it was rejecting a cargo
of French wheat on grounds of contamination with poppy seeds, which looks to
have replaced ergot as Egypt's import niggle of choice.
"Exporters are closely monitoring the situation in Egypt,"
said Agritel, adding that "recent local regulatory demands will complicate the
positioning of operators in next tenders" by Egypt's Gasc authority.
It may mean an increased premium too.
Meanwhile, the French farm ministry earlier raised by 1.0m
tonnes to 37.8m tonnes its forecast for the domestic soft wheat harvest.
'No longer a major
In New York, cotton
futures for December dipped a further 0.9% to 71.49 cents a pound, signally,
falling back below their 200-day moving average, as worries continued to ease
over damage to the US crop from Hurricane Irma, and its remnants.
"While Irma caused plenty of destruction and the many lives
that have turned upside down can't be downplayed, the overall force of the
storm and what it left in its wake was somewhat less than once anticipated,"
said Benson Quinn Commodities.
Traders at Ecom said that while there were "mixed views" on
Irma, "what we can say is that the market usually knows first".
And based on price movements, "the market believes that Irma
is no longer a major threat to cotton production".
'No major damage yet'
Ecom added that Irma's winds are now down to about around
30mph, "and rainfall is only expected to be around 3.5 inches.
"Hurricane Harvey saw the Delta area get 5 inches of rain
with no major damage as of yet" to cotton crops.
It does have to be said that USDA data overnight showed Irma
arriving at a sensitive time, with 51% of Georgia bolls opening – a particularly
vulnerable crop phase.
Still, also in bear's favour was an upbeat forecast from Abares on the domestic cotton harvest, seen at 2017-18 at its third biggest ever, despite the country's drought.