Anyone for cocoa?
Coffee was certainly out of fashion
There was excitement around in agricultural commodities, but
most of it seemed focused on softs, which witnessed strong gains in the bean
that goes for crushing, by hefty losses in the one that gets roasted.
Cocoa hit the highest level since August 2011 in New York,
for a nearest-but-one contract, as the September lot touched $3,138 a tonne,
before easing a touch to settle at $3,135 a tonne, up 2.7% on the day.
In London, cocoa for September closed up 2.6% at £1,958 a
tonne, only £1 off its day high, but didn't quite manage to top last year's
£1,964 a tonne.
Falling exchange inventories were viewed as fuelling the
increase, touching a raw nerve among commercial buyers at a time when the cocoa
market is amid a run of successive year of world production deficit.
Inventories for delivery against London futures were, at
48,340 tonnes as of Monday, down nearly 1,000 tonnes in two weeks, data
meanwhile, faces something of the opposite problem – for now - with the Green
Coffee Association having estimated US green
coffee inventories last month at 248,826 bags, up 4.8% year on year and an
Brazilian harvest weather remains broadly favourable, in
terms of being dry, allowing for pressure on prices from that score, even if,
thanks to drought, the usual seasonal ramp-up in supplies will not prove as big
as roasters had hoped for six months ago.
In fact, the country has harvested some 35-40% of its crop,
according to the Conselho Nacional do Café producers' group.
Arabica coffee for September dropped 3.3% to 174.90 cents a
pound in New York.
coffee fared significantly better, adding 0.3% to $2,034 a tonne in London for
September, amid ideas that there is a buyer around against the expiring July
There is much focus on whether open interest will come into
next week at a relatively high level, implying potentially that a buyer is
using the futures for physical delivery, rather than waiting for supplies to
come in from the likes of Indonesia or Vietnam.
For raw sugar, the problem was the opposite,
with thoughts of few buyers keen on using the soon-to-expire July futures for
getting ownership of the sweetener encouraging a drop of 2.2% to 18.32 cents a
pound in the September lot.
For grains, meanwhile, the focus was more on two key US
Department of Agriculture reports due on Monday, on US grain stocks as of June
1, and on crop sowings.
managed a strong finish to the week for the new crop December contract as
DuPont's profit warning, on disappointing corn seed sales, spurred ideas that
maybe plantings of the grain had been badly affected by a cold and wet northern
US spring after all, as a survey by Roach Ag had signalled.
Monsanto's results on Wednesday also showed a drop in corn
seed revenues and profits.
As an extra help, and perhaps a pointer to the US
experience, Statistics Canada cut by 250,000 acres to 3.12m acres the forecast
for Canadian plantings.
December corn added 0.9% to $4.47 ¼ a bushel, outperforming
the old crop July lot, which added 0.25 cents to $4.43 a bushel.
Reverse for soybeans
For soybeans, however,
the seed company data has been less bullish for prices, with DuPont saying its
sales had beaten expectations.
Soybeans can be sown later than corn, meaning that difficult
spring planting conditions can fuel a jump to the oilseed from the grain.
That may have happened in Canada too, where the estimate for
plantings was hiked by 319,000 acres to 5.59m acres, up 24% year on year.
New crop November soybeans tumbled 1.4% to $12.28 a bushel,
underperforming the old crop July lot, which lost 0.4% to $14.32 a bushel.
It also knocked a big dent in the new crop soybean:corn
ratio, cutting it to 2.75:1 from a figure above 2.8:1.
'Not had any
Wheat, seen as less
likely to see any kind of shock from Monday's reports, ploughed something of
its own furrow, continuing to recover on ideas of winter wheat setbacks, in
terms of rains compromising quality and slowing combines.
"Harvest progress in Kansas continues to be significantly
slowed because of continued rain showers," US Wheat Associates said in a
harvest report, talking in particular of the hard red winter wheat variety
traded in Kansas City.
While quality is starting to improve, as harvest spreads
from the southern Plains areas worst affected by drought for much of the growing
season, yields remain soft, at 0-50 bushels per acre (0.3 to 3.4 tonnes per
At Rice Dairy, Jerry Gidel said: "We knew that yields were
going to be bad in many areas. The poor yield figures are not a surprise.
"But what we have not seen is the yields of 75-100 bushels
per acre you would normally see in parts of Kansas. We have not had any
For soft red winter wheat, US Wheat Associates reported some
decline in quality factors from the early harvest, with protein averaging 9.7%,
a fraction below the 2013 final result, and 1,000 kernel weight down to 31.4
grammes from 33.5 grammes last year.
Furthermore, there was "a significant decrease this week in
falling number value from samples harvested after the rain in Arkansas".
The falling number is the measure of the extent of kernels
which have started turning protein into starch, as often happens after rain
onto ripe crop, but a threat to milling quality.
Chicago soft red winter wheat for September closed up 1.5%
at $5.93 ¾ a bushel.
Kansas City hard red winter wheat for September added 1.2%
to $7.22 ¾ a bushel, returning back over its 10-day, 20-day and 200-day moving
In Europe, Paris wheat added 0.5% to E187.75 a tonne for
November delivery, helped by Chicago, but also supported by FranceAgriMer data
showing the condition of the French soft wheat crop, while still strong, now
rated behind that a year ago.
London wheat for November edged 0.3% higher to £137.60 a