It proved difficult to hang on to some of the positive spirit around earlier in the day,
sparked by well-received data on Chinese factory activity.
The average commodity, as measured by the CRB index, added
0.4%, encouraged by a 0.4% drop in the dollar fostered by some idea of risk-on
sentiment spurred by improved Chinese manufacturing growth,
And some agricultural commodities did even better.
Take New York raw
sugar, which rose more than 3% at one point, before losing some ground to
close at 19.75 cents a pound for March, a gain of 2.1%.
But wheat, for instance, found early headway harder to hold on to.
Sugar's gains reflected the weaker dollar and also data from the
Commodity Futures Trading Commission, the US regulator, showing a rise in the net
short position among overall non-commercial investors, threatening a price
spike if these holdings get covered.
Fundamentals are less supportive, given the unfulfilled
pressure among producers to sell, said Nick Penney at Sucden Financial.
"We continue to believe that there is expected pricing
pressure towards the 20 cents-a-pound area, especially from Brazilian producers
given the weakness in the Brazilian real," he said.
"Thai selling is rumoured to be above that, but we feel will
eventually compete with Brazil.
"We expect another test of the 19 cents-a-pound level soon,
but acknowledge that in the absence of any news, the current range may be
maintained for a while."
In Chicago, soybeans
hung on to gains too, adding 1.0% to $14.53 ¾ a bushel for January delivery.
But it was hard going against soft grains, and required some
upbeat ideas on US exports, and their prospects.
Weekly US export data, as measured by cargo inspections,
came in at 51.1m bushels, a rise of more than 4m bushels week on week, and deemed
pleasing to the trade, as were some of the breakdown statistics.
"It is interesting to note that China received 38m bushels
of that total," Darrell Holaday at Country Futures said.
"Industry estimates are that China has received 410m bushels
of the 587m they have purchased in the current crop year," implying plenty more
buying to come.
'On a mission'
And South America hardly looks the place to buy it, with
Brazilian soybean exports slumping by more than 70%, month on month, in
November as supplies run dry.
shipments slumped some 30%, and soyoil
Besides disappointing supplies, following a drought-hit
harvest earlier in the year, availability
is also being reduced by strong competition for Brazil's limited port capacity.
"The higher export prices in US are driving buyers to South
America. However, shipments are now running about a two-month delay out of
South American ports," Paul Georgy at Allendale said.
At broker RJ O'Brien, Richard Feltes said that "cash sources
report loading times for early March Brazil soy cargoes are already approaching
55-60 days, suggesting continued brisk demand for US soybeans which are already
largely committed for 2012-13.
"The soy market on a mission to slow usage which suggests
penetration of $15.00 a bushel before year end - especially if next Tuesday's
crop report trims US soy stocks."
The US Department of Agriculture will on Tuesday release its
latest monthly Wasde crop report, a key event of the farm commodities calendar.
For corn, the
dynamics were something of a contrast, with US exports for the week poor, at
9.63m bushels, down 40% week on week.
Meanwhile, November's Brazilian shipments were strong, at
3.91m tonnes, up 6.8% on the October figure.
But not all the comment was downbeat, with Darrel Good at
the University of Illinois, suggesting that while the pace of US corn exports
is "very low, some increase in the demand for US corn is expected yet" in 2012-13.
With Argentine weather wet, and much of the US still in
drought, raising some fears over 2013 prospects, "current market conditions
point to continued strong corn prices" until a much-watched report on January
11 on US crop inventories.
Still, US Commodities flagged that deliveries against
Chicago's expiring December futures contracts "continue to be larger than
expected" for many commodities, with corn's at 246 lots.
March corn closed up 0.3% at $7.54 a bushel.
That was better that wheat
could manage, weighed by deliveries of 1,939 contracts, indicating better value
for producers in selling in Chicago rather than on US cash markets.
And, as an extra setback for wheat, some weather forecasts
indicated rain for drought-plagued winter wheat seedlings.
'Moisture may be
headed to the Plains'
There are some thoughts that some moisture may be headed to
the Plains in the first half of next week," said Darrell Holaday, if being sceptical
of the forecasts.
"We really do not see any significant rainfall forecast for
the Plains showing up in the Plains. We do see higher prospects for the
Midwest, but are not optimistic about the hard red winter wheat areas."
That was enough to wipe out the early optimism stemming from
US victory at an Egyptian wheat tender for the first time in 2012-13,
"It appears the US wheat values have pulled back low enough
to be competitive," US Commodities said.
Still, they pulled back a bit more for good measure, with
Chicago's March contract ending down 0.4% at $8.60 ¾ a bushel.
In Paris, wheat for January edged down 0.1% to E269.25 a
tonne, while London wheat for March edged all of £0.15 higher to £227.15 a
tonne, helped by continued concerns for the UK's 2013 crop.