PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 20:42 GMT, Friday, 27th Jun 2014, by Agrimoney.com
Cocoa soars, coffee cools. Corn, soybean futures diverge too

Anyone for cocoa? Coffee was certainly out of fashion on Friday.

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 overnight showed.

Coffee drops

Arabica coffee, 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 eight-month high.

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.

Acquisition strategies

Signally, robusta 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 contract.

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.

Company data

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.

Corn actually 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 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 outstanding yields'

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 hectare).

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 outstanding yields."

Quality deterioration

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.

Price rises

Chicago soft red winter wheat for September closed up 1.5% at $5.93 a bushel.

Kansas City hard red winter wheat for September added 1.2% to $7.22 a bushel, returning back over its 10-day, 20-day and 200-day moving averages.

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 tonne.

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