Traders expecting timid markets in the run up to Tuesday's key
Wasde crop report were disappointed when it came to soybeans.
The oilseed rose 1.4% to $13.43 ¾ a bushel in Chicago, for
January delivery, the strongest finish for a spot contract in getting on for
Technically, it was positive too, in lifting the contract
clean over all its major moving averages.
On the continuous chart, Monday bought only the second close
since July for a spot contract over the 100-day moving average.
Still, the spark was a fundamental one, with the
announcement by the US Department of Agriculture of the export sale of 290,000
tonnes of US soybeans to China, all but 60,000 tonnes for this season.
Investors have been fretting over a lapse in Chinese
business, given the country's rejections of US corn shipments on grounds of
containing an unapproved genetically modified variety, but which some observers
have feared could have a political dimension too, or merely a wish to curtail
buy-ins in the light of a strong domestic harvest.
Furthermore, in December last year, Chinese purchases of
"Many are now thinking we are past the peak of Chinese
buying of US soybeans," Allendale said, shortly before the 290,000-tonne order
As a further support, soymeal
for January soared 2.6% to $438.70 a short ton in Chicago, its own best close
Earlier, on China's Dalian exchange, soymeal for May, the
best-traded lot, added 0.7% to 3,369 yuan a tonne for May delivery.
Furthermore, it was helpful in Chicago that "there were no
deliveries" against the expiring December contract, Jerry Gidel at Rice Dairy
said, indicating that cash markets remain a better bet.
Soybeans also received help from firm US data on exports
themselves, at a robust 60.4m bushels last week, up from 55.0m bushels the week
And the US Department of Agriculture's Wasde report on Tuesday
is expected to cut the estimate for US stocks at the close of 2013-14, a price
The Wasde is expected to trim the estimate for US corn
stocks too, although not by nearly enough to render supplies anything but
US corn export sales have been strong, with shipments also
decent last week, at 40.2m bushels, up from 36.0m bushels the previous week –
and 8.1m bushels a year before.
However, set against this is the concern provoked by China's
rejection of cargos of US corn, in a move which many fear could set a trend.
"Reportedly, 18 cargoes of US corn sitting near China that
have been rejected now looking for a new home," Darrell Holaday at Country Futures
At Chicago-based RJ O'Brien, Richard Feltes detected "two-sided
trade in corn, amid conflicting cross-currents of strong domestic demand and
the prospects for a prolonged delay in resolving the US corn export glitch to China".
However, with the export data firm, and the Wasde ahead, the
temptation was for investors to close some of the short positions on corn which
have been profitable bets.
Corn for March rose 0.9% to $4.38 a bushel, staying
healthily above its 20-day moving average, for a fourth successive close (for
the first time in four months), and back within sign of its 50-day moving
'Little to no snow
It was left to wheat
to disappoint bulls, falling 0.1% to $6.50 ½ a bushel in Chicago for March
delivery for the contract's lowest close in nearly three months.
Sure, "some traders continue to focus on the risk of winter
kill as cold temperatures stretch across the US and some of the wheat has
little to no snow cover to protect it", CHS Hedging noted.
But there are no disaster scenarios as yet, with weather
service MDA estimating that 5% of the US Plains hard red winter wheat belt was
hit, of which only a small portion will have been damaged.
(Hard red winter wheat itself rose 0.1% to $6.96 a bushel
for March delivery.)
US weekly exports were relatively modest, at 19.8m bushels,
if up from 15.5m bushels the week before.
Meanwhile last week's "big production estimates out of
Canada and Australia looks to keep wheat on the defensive", Benson Quinn Commodities
Coffee in demand
Among soft commodities, robusta
coffee extended its recovery, adding 2.9% to $1,769 a tonne in London for
January delivery, helped by ideas of squeezed supplies, if only temporarily,
from Vietnam as producers withhold sales in a campaign, which seems to be
working, to support prices.
As for how long it works, a record Vietnamese harvest is
seen as forcing producers' hand at some point, and the March contract did
achieve smaller gains, if still significant ones, up 1.7% at $1,723 a tonne, it
best close in nigh on three months.
Technically, "London coffee prices [for March] have built on
support offered by the 10-day moving average in recent sessions, with support
around $1,650 a tonne holding up firm over the past few sessions," Sucden Financial
But how far can the rally go?
The broker noted that, on the upside, at $1,730.87 a tonne, "resistance
in recent months has held relatively firm".
However, raw sugar
for March dropped 0.2% to 16.55 cents a pound in New York, the lowest finish
for a spot contract in three months, ahead of data due on Tuesday expected to
show a strong finish to the Brazilian Centre South cane harvest.
"There is little fundamental news of a bullish tint that is
supporting values," Sucden said.
"Brazil's Centre South crop is continuing to be harvested
and final crush numbers are now expected to approach 600m tonnes," well above
ideas below 590m tonnes which have held until recent days.