For once, grain futures set contract lows, and then
recovered, reversing their usual recent pattern, as the weight of more bullish
news at last held.
Grain and oilseed futures did not manage such healthy gains
as New York arabica coffee, which
soared 4.9% to 176.60 cents a pound in New York for September delivery, closing
above their 50-day moving average for the first time in two months, boosted by
a downbeat FCStone report on the Brazilian harvest.
Nor was it exactly clear why grains chose Wednesday to end,
or at least interrupt, their downward trajectory.
But the results made pretty good reading across the board
for crop bulls more used over the last three months to heading home in tatters.
Certainly, there was some cause for the rally in the rapeseed complex, with Canada's AAFC
farm ministry downgrading its forecast for the domestic crop to 14.45m tonnes,
well below the US Department of Agriculture estimate of 15.7m tonnes.
AAFC raised to 4.4%, from 1.2%, its estimate for the amount
of Canadian canola sowings not
making it to harvest, following flooding in Manitoba and Saskatchewan.
Meanwhile, there are growing reports too that the
disappointing start to the UK rapeseed harvest reported by Agrimoney.com last week may be more than a flash in the pan, reflecting the status in other parts
of north west Europe too.
"There are reports of rapeseed yield in western Europe being
lower than expected," Jefferies Bache noted, although the EU is still expected
see a record harvest.
Harvest-time rains, as Europe has suffered, can encourage
sprouting in ripe rapeseed as it does in wheat, with heavy rains or hail also
representing a quality threat, in shaking seeds from brittle pods.
Rapeseed for November - which dived as far as E300.50 a
tonne in the last session, the lowest for a nearest-but-one contract in more
than four years – ended this session at E329.25 a tonne, a rise of 2.2% on the
Canola for November closed up 1.1% at Can$438.00 a tonne in
'Did not indicate
That was one help for soybeans,
which ended up 1.8% at $10.76 ½ a bushel in Chicago for November delivery,
recovering from a fresh contract low of $10.55 a bushel reached earlier.
But there were other supports too, such as a strong
performance by soymeal, which appeared
to show something of delayed reaction to the strong US exports unveiled on Tuesday,
and ended up 2.5% at $391.50 a short ton for August delivery, closing above its
10-day moving average for the first time this month.
The December contract added 1.6% to $347.30 a short ton.
And then there was a turn less benign in the US Midwest weather.
"An overnight weather model run that was did not indicate
significant moisture in the western areas pushed soybeans higher," Darrell
Holaday at Country Futures said.
US soybeans, after all, have yet in earnest to get through
their sensitive pod-setting period, making weather more of a threat to the
oilseed than to corn, which is well
into its vulnerable pollination stage.
(In fact, some corn harvesting has begun down south, eg in
And corn was indeed more reluctant to rise, with the Doane
crop tour showing what the broker's Bill Nelson termed "possibly the highest
yield potential in history of the tour".
There is also comment over weakening US basis, as high crop
forecast deter end users from putting in much coverage.
Still, corn for December added 0.7% to $3.70 ¾ a bushel,
having earlier set a fresh contract low of $3.65 ¾ a bushel.
Wheat did better
-especially Chicago soft red winter wheat, the speculators' favourite, in which
hedge funds have a large net short position.
Chicago's September contract added 1.2% to $5.30 ¾ a bushel,
well ahead of the 0.4% rise to $6.20 ¾ a bushel in Kansas City hard red winter
wheat for September.
But there are signs of demand, with Iran in the market for
Black Sea grain, and Egypt purchasing 235,000 tonnes of wheat.
OK, that was from the Black Sea too, but the absence of French
offers, and retreat in Romanian ones, was viewed as sign of the squeeze in
quality wheat supplies from the European Union, at least.
In Paris itself, wheat for November ended up 0.8% at E179.50
a tonne, closing back above its 10-day moving average.
Furthermore, wheat gained a fillip from AAFC's downgrade in
its estimate for the Canadian crop to 27.74m tonnes, down nearly 10m tonnes
year on year, and again below the USDA estimate.
Still, whether crops can hang on to gains…
CHS Hedging noted that "reports of better yields for
northern hard red winter wheat and soft red winter wheat continue to add
downward pressure to the market," although at least the winter wheat harvest is
in its final stages.
"Initial reports out of the spring wheat tour in North Dakota
are for high crop potential," the broker added.
Back among soft commodities, cocoa for September soared 1.7% to $3,185 a tonne in New York, after
hitting a three-year high for a spot contract of $3,204 a tonne earlier, on
The London November contract ended up 1.6% at £1,988 a
tonne, having hit a contract high of £1,996 a tonne earlier.
The bean continues to gain support from strong Asian and
North American grinding data last week, which has supported ideas of a world
production shortfall, with a strong Ivory Coast cash market helping too.