PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 20:42 GMT, Thursday, 30th Jan 2014, by Agrimoney.com
Evening markets: export data underpin grain, soybean futures

It was a somewhat better day for agricultural commodity futures, as it was for many shares too, although not for all the same reasons.

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.

Indian delay

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 contract.

'Absolutely dry'

Arabica coffee, 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 market too.

"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 ones.

And weekly US Department of Agriculture export data held relief for bulls in both crops, and in corn too.

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 five months?

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 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.

'Conversations of winterkill fading'

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 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.

Data details

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.

 

Downbeat forces

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.

'Marketing-year high'

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 biggest.

Cotton for March ended 0.6% higher at 86.03 cents a pound in New York.

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