OK, Cyprus's debt problems have not disappeared.
But by taking the poor precedent of a tax on bank deposits
off the table, and winning support from the European Central Bank for
maintaining liquidity in the event of a flight of savers, the island wiped most
of the furrows from investors' brows. For now, anyway.
higher, by 0.4% on Wall Street in late deals, after gaining 1.4% in Paris, and
0.7% in Frankfurt.
The safe haven of the dollar
eased 0.2%, another support to commodities, which gained 0.6%, as measured by the
And many agricultural commodities outperformed, notably cocoa which, remaining near multi-month
lows on both sides of the Atlantic, picked up a bit of bargain hunting
Indeed, there are ideas that prices may have set a floor at
their lows earlier this month, with chart watchers getting a boost from the rise
in the nine-day moving average for New York's May contract thorough the 20-day
That has generally been a decent predictor of rising prices to
come – although the last occasion, a weak breakthrough two months ago, provided
a duff signal.
The contract closed up 2.5% at $2,152 a tonne, while its
London peer added 2.0% to £1,459 a tonne.
'Good quarter of
In Chicago, wheat
wasn't far behind, gaining 1.9% to $7.36 a bushel for the May contract, now up
8% in two weeks, amid further talk of demand perking up, and some US crop fears
Libya added to the series of countries making purchases,
buying 50,000 tonnes of wheat, albeit likely from Hungary, while Oman ordered
10,000 tonnes of Indian wheat and Algeria sealed deals for 350,000 tonnes,
likely from France.
This following Tunisia's purchase earlier in the week, with
Iraq and Jordan demand still in play.
Despite the preference for other origins in these headline
deals, "US soft red winter wheat values remain competitive", Benson Quinn Commodities
said, referring to the type traded in Chicago.
Meanwhile, US hard red winter wheat, as traded in Kansas, "is
quietly putting together a good quarter of exports".
A supply fear re-emerged too, in terms of potential damage
to the winter wheat crop from cold weather forecast for this weekend.
"Some concern is mounting about the cold temperatures moving
down through the hard red winter wheat area," Darrell Holaday at Country Futures
"The biggest concern will be in the central and western areas
of Oklahoma, especially if there is no moisture ahead of the cold temperatures,"
to give a snow blanket and protect seedlings from frost.
Unfortunately for growers, it looks like there will not be
precipitation where it is needed.
OK, the GFS model is quite generous on the moisture. But
given the inconstancy of its forecast, its findings are likely "BS" according to
Other models show "most of the Plains and the upper
Mississippi Valley/ western Corn Belt completely clear of any sort of rainfall
or snowfall", with temperatures "just cold for late March".
In fact, what the models do agree on is "very cold
temperatures for the Plains and Midwest next week".
Whether cold enough to damage crops, of course, will become
clearer as the system nears.
But it encouraged holders of the large net short position in
Chicago wheat to close holdings, putting upward pressure on prices.
Wheat for May rose in Paris too, boosted by Algerian demand,
adding 2.0% to E243.25 a tonne, while adding 1.6% in London to clamber back
over £200 a tonne, to 201.00 a tonne.
'Should be selling'
The idea of cold US temperatures kept upward pressure on Chicago
corn too, in potentially hampering
sowings, countering some bearish pointers.
One is that the grain is technically overbought, with US Commodities
saying that "the corn market is now approaching the first level of overbought
Another is talk of farmer selling.
"Producers have been and should be selling corn at these levels,"
Benson Quinn Commodities said, forecasting that basis levels will "continue to
show weakness on newly available supplies.
"There could be pronounced weakness corn basis levels, if
the rally [in futures] continues."
'Limit the ability to
Still, other observers took a different tack, with US Commodities
saying that "the near-record tight corn basis continues to drive the market
"End users continue to scramble to cover usage prior to the March
28 report" on US stocks, expected to reveal US corn inventories some 1bn
bushels lower, as of the start of the month, than a year before.
But, on the bullish side, Benson Quinn itself acknowledged
that "the recent weather pattern will limit the ability to plant early, which
will raise concerns about when the new crop is available".
Country Futures' Darrell Holaday said: "There is some
concern developing about the cold temperatures in the first 18 days of March
and the prospect for that to remain that way through March.
"The concern is the impact on corn planting. You know how a
market feels about an early planted crop," which should, in theory, mean higher
'More plants coming
On the demand side, the grain gained support too from an
improved US ethanol production number, up 12,000 barrels a day at 809,000
barrels a day last week.
US Commodities said: "Ethanol production continues to grow
as more plants are coming back online due to the profitability," the latest
ones being two Valero sites revealed this week as having the covers taken off.
Furthermore, stocks fell again too, by 223,000 barrels to
18.5m barrels, a sign of continued demand.
Corn for May gained, although by a relatively modest 0.5% to
$7.32 ½ a bushel, losing its premium against wheat.
likely seems required'
Corn also lost ground against soybeans, which is not quite as Macquarie hoped, in a forecast that
South American dynamics boded worse for prices of the oilseed than the grain.
Chicago soybeans for May closed up 0.9% at $14.09 ¾ a bushel
on the day – its first gain in seven sessions.
Sure, "the trade lacks tangible evidence that demand for
old-crop soybean exports exists", Benson Quinn Commoditied noted.
But the market is also "oversold" following its losing
And, as noted earlier, Jerry Gidel at Rice Dairy issued a reminder
of just how tight US stocks are, with 68% of forecast demand for 2012-13
notched up in the first half of the season, meaning that "some price rationing likely
seems required" to tailor consumption to supplies in the second half.
The implications are that the US soybean crush "will
need to retrench 26% to 688m bushels", while exports in the second half
"will be limited to 180m bushels or only 15.5% of this protein's first
Cotton rally frays
lost its way, on ideas of Chinese plans to release cotton from government
stockpiles, with India set follow suit.
With Chinese imports of US cotton a major support for New
York futures, the idea of sales of some 3m tonnes from state reserves, as
forecast by the International Cotton Advisory Committee, sent New York's May
contract down 2.2% to 89.10 cents a pound.
This time, the new crop December lot outperformed in losing
only 0.3% to 87.98 cents a pound.