Google managed to reverse early optimism on many markets.
But for Chicago, matters of the virtual world came a distant second to considerations
about actual shortfalls in crop supplies.
The feeling that a seasonal low has been put in to grain and
oilseed prices, as Agrimoney.com highlighted earlier, only gained momentum, gradually,
over the day.
After all, crops typically lose downward pressure when
harvest ends, and with it the once-a-year spike in supplies.
Then attention turns to cash markets, which are being
supported by a reluctance by growers to sell at levels well below summer highs.
'Lower hedge pressure'
"The cash market is driving this market higher," Darrell
Holaday at Country Futures said.
"With harvest winding down - basically finished - basis
levels are reflecting the tighter supplies and have moved to stronger levels
throughout the major areas," with corn
in Illinois apparently going for $0.60-a-bushel above December futures.
Benson Quinn Commodities said: "Corn and soybean harvest is nearing completion
easing producer hedge pressure on markets."
US Commodities said: "The cash markets are firming as
harvest winds down. Corn is supported by the lack of farmer selling and the
firmer basis levels."
Even in the cotton market, Georgia-based cotton broker Keith
Brown said that "corn and soybeans look they have put in their harvest lows".
And that meant a rethink for bears who have had harvest
pressure on their side the last month or more, driving down soybeans nearly $3
a bushel from summer highs at one point this week, with corn down $1 a bushel.
"This is a key day for soybeans," US Commodities noted early
on, saying that, technically, futures were "at reversal price levels and
"This is a dangerous day for the shorts if the market pushes
Which it did, closing up 2.3% at $15.45 ½ a bushel for the
'Much drier than
Sure, there were hurdles for the oilseed, such as a weekly US
export sales figure which, at 523,000 tonnes, fell short of forecasts of at
least 650,000 tonnes.
However, on the price positive side, Country Futures' Darrell
Holaday noted that more northerly parts of Brazil "remain much drier than
desired", with the sowings window wide open, even if rains further south appear
to be boding well for the crop – in driving farmers from corn.
And there is still talk of plenty of Chinese interest in US
soybeans, even if this was not so evident in the weekly data.
Furthermore, the buying improved the crop's chart picture,
driving the November lot back above its 10-day moving average, for instance, only
reducing further the pressure to sell
which has marked so many recent sessions.
'Talk of Chinese
sales were disappointing too, at 166,000 tonnes, below forecasts for at least
200,000 tonnes, if reaching a level more than 10-times those of the previous
Still, there are ideas China might buy here too, contrary to
waning market figures for the country's imports, following an apparently decent
"There is talk of Chinese interest in buying corn and wheat to replenish reserves," Mr
"It does not matter where they buy it. If the Chinese buy a substantial
amount of corn or wheat, it is bullish," with some 300,000 tonnes of wheat
already purchased from Canada, reports this week said.
US vs Brazil
Furthermore, US corn is beginning to look more competitive,
or at least less uncompetitive, on export markets, with South American prices
rising as supplies erode.
"The corn basis levels in Brazil have rallied $0.40 a bushel
from the lows and has helped narrow the discount to the US," US Commodities
"The US remains the most expensive world corn. The spread
however is narrowing."
And after all, the poor pace of Argentine corn sowings, and
some losses in southern Brazil too, are raising fears over the early-2013
As an extra fillip to prices, Strategie Grains reduced
further its forecast for the European Union corn harvest.
Corn for December added 1.9% to $7.60 ¾ a bushel.
That was some help for wheat,
which lacked quite the rallying point for a rally, as it were, that the row
crops did in the seasonal low theme.
Some long-running factors are in wheat's favour, including persistent
doubts over the Australian crop, and with the Buenos Aires grains exchange
restating a forecast for the Argentine harvest of 10.1m tonnes, well below the
Furthermore, US export sales were, at 410,000 tonnes, a
little above expectations, even if as Benson Quinn Commodities pointed out, the
"accumulative pace remains behind last year".
Wheat for December added 1.4% to $8.68 ½ a bushel.
Chicago vs Paris
That was enough to regain a little ground from Paris wheat
for November, which gained 1.3% to E259.75 a tonne, after in the last session
posting a fresh high in its spread against the Chicago benchmark lot.
"This is coming with French wheat meeting the lion's share
of recent tenders," Rory Deverell at FCStone said.
Still, London wheat did better, gaining 1.5% to £201.40 a
tonne for November delivery, after Agrimoney.com revealed that UK rains were
adding insult to injury by hampering significantly sowings for the 2013 crop, after slashing
the quality and quantity of the newly-finished harvest.
Among soft commodities, New York December cotton ended a hugely volatile session –
extending from 1.7% gains to limit down – by closing down just 0.2% at 77.72
cents a pound.
The extent of the late recovery bodes well for trading in
the next session, Keith Brown at broker Keith Brown & Co said.
But New York arabica coffee
for December achieved less on the rebound front, ending down 1.8% at 158.60 cents
a pound, the lowest finish for the contract in nearly four months.
"After a good week of knocking on the door at the 160/159-cents-a-pound
support level, prices on have finally broken through, and after all that
winding up, with some force too," Sucden Financial said.
Below 160 cents a pound "stops were triggered", meaning
automatic sell orders, "and speculators began to short the market", before some
roaster buying steadied the market.