It was a somewhat better day for agricultural commodity futures, as it was for many shares too, although not for all the
There was a common thread, in the calmer sentiment over
emerging market currencies - despite a weak reading from the final January
HSBC/Markit purchasing managers index of Chinese manufacturing activity, which
came in 49.5, down 0.1 from the "flash" estimate which spooked markets earlier
in the month.
Frankfurt shares closed up 0.4% and Paris stocks up 0.6%,
with Wall Street shares also up 0.6% in ate deals.
For agricultural commodities, the improved thinking on
emerging markets was most keenly felt through a 1.0% rebound in the Brazilian real, to R$2.41 to $1, putting upward
pressure on the price of assets in which Brazil is a major force.
These assets include raw
sugar, which rebounded 1.7% from a three-year closing low, for a spot
contract, to finish at 14.99 cents a pound in New York for March delivery.
A delay by India, the second-ranked sugar producer after
Brazil, to a decision on supporting sugar exports also helped.
Orange juice, of
which Brazil is also the top ranked producer and exporter, also rose for the
first time in a week, by 1.2% to 139.70 cents a pound in New York for the March
another crop of which Brazil is the biggest grower, soared 2.5 to 120.00 cents
a pound for March, also gaining help from mounting ideas of dryness in
Brazilian growing regions, a factor also gaining a little comment in the sugar
"Central and east central Brazil remains absolutely dry" in
the one-to-five day weather outlook, WxRisk.com said.
And in the six-to-10-day outlook too "most regions are dry
throughout all of east central and central Brazil".
Strong export data
But for grains, US exports remain particularly in focus,
given fears of a slowdown in wheat,
and of Chinese importers, the world's biggest, switching from American soybean supplies to South American
And weekly US Department of Agriculture export data held
relief for bulls in both crops, and in corn
Indeed, it was corn which had the best figure – export sales
of 1.84m tonnes for 2013-14, the best result of the season so far, and 106,000
tonnes for next season on top.
First monthly gain in
Furthermore, the USDA, through its daily alerts system,
unveiled the sale to "unknown destinations" of a further 127,000 tonnes of
corn, taking total sales unveiled on the day well above 2m tonnes.
It also takes to export commitments to 87% of the total the
USDA has forecast for 2013-14, less than five months into the marketing year.
Corn for March closed up 1.4% at $4.33 ½ a bushel in
Chicago, within an ace of closing above its 75-day moving average for the first
time in eight months.
"Corn will possibly have its first monthly gain in five
months in Chicago. Are we at demand values?" US Commodities asked.
The US wheat
export data was decent too, at 795,000 tonnes old crop, the best in three
months, and more than twice some market expectations.
That said, on the more bearish side, US weather is
improving, with cold temperatures easing, and snow on its way to give extra
protection to winter wheat seedlings from frost, besides presenting extra moisture
at melt time.
"As temperatures moderate in wheat growing regions of the US
conversations of winterkill fade," CHS Hedging said.
Weather service MDA said that "snow cover should build
across northern areas on Friday, and should build in central areas next week".
Wheat for March added 0.4% to $5.53 ½ a bushel in Chicago
(still, definitely not enough to put the grain on for a monthly gain), while
edging 0.1% higher to E190.25 a tonne in Paris.
For soybeans, US
export data were, on the face of it, less impressive, coming in at 495,000
tonnes for old crop, "down 22% from the previous week, and 18% from the prior
four-week average", in the USDA's words.
However, some of the smallprint was more upbeat,
particularly the dearth of cancellations of orders from China, a dynamic which
has investors particularly concerned.
"The soybean number at 465,000 tons was a little better than
expected, but most importantly it did not contain any Chinese cancellations,"
Darrell Holaday at Country Futures said.
In fact, there were actual exports of 1.32m tonnes to China too,
reducing the amount of soybeans up for potential cancellation.
Still, the news was not all so positive.
Whatever the USDA data showed, "rumours persist that China
may have cancelled US origin soybean purchases", CHS Hedging said.
Furthermore, China, the top soybean importer, on Friday
starts a lunar new year holiday "which should reduce soybean demand news for
about a week".
And, longer-term, there is renewed talk of the bird flu epidemic.
"Poultry farmers in China are reducing bird inventories as
the H7N9 virus spreads," CHS said.
Soybeans ended higher, but by a modest 0.5% to $12.75 a
bushel for March delivery.
US export data for cotton
were firm too, at 480,000 running bales for old crop, "down 3% from the
previous week, but up noticeably from the prior four-week average," according
to the USDA.
This was despite higher prices, and included a healthy
162,000 running bales to China, reassuring that the country's revised cotton
subsidy plans are not choking off demand for foreign supplies, yet.
For new crop, exports topped 304,000 running bales, "a marketing-year
high", including 72,600 running bales bought by Chinese importers, the world's
Cotton for March ended 0.6% higher at 86.03 cents a pound in