The Santa seasonal came good, eventually, after all, although
investors hoping for some of the hefty gains corn and soybeans have shown in the
past in the days before and after Christmas went home disappointed.
Not that gains were easy on a somewhat negative day for financial
markets, in which seasonal cheer was undermined by concerns over the US fiscal
cliff, and the lack of progress yet on US budget negotiations between Democrat
and Republican politicians which would avoid falling over it.
Wall Street shares eased 0.4%, as did commodities as a
whole, as measured by the CRB index.
Against that background, Chicago soybeans' rise of 0.5% to $14.35 ¾ a bushel for March delivery
looked a little more creditable.
Corn for March gained
0.3% to $7.04 ¼ a bushel.
Some of this was attributed to short-covering ahead of the
holiday, as investors took profits on short positions which have proved
profitable bets of late, as corn, soybeans and wheat have hit multi-month lows.
The extent of short positions in corn and wheat especially
was highlighted in weekly regulatory data which showed speculators turning net
short for the first time in six months – raising indeed ideas that hedge funds
may be wary of putting on more bets on losing prices.
But there was some fundamental reason for concerns, with
weather in South America OK, but not at the ideal levels some investors seemed
to be pricing in last week.
Although forecasts are pencilling in rains for northern
Brazil, "the drier trend there merits some attention", Benson Quinn Commodities
Meanwhile, "portions of Argentina are expected to see
moisture over the course of the next couple of days", the last thing that
sodden fields need, although "a drier pattern should be present late in the
And, as an extra boost, there are growing signs of end-users
taking advantage of lower prices to make purchases, US Commodities said.
"Commercial buying has been helping to support grains off
the big break last week," the broker said.
On exports, US cargo inspection data due on Wednesday, which
require a weekly rate of only a modest
18.3m bushels to reach US Department of Agriculture forecasts for 2012-13, "are
expected to be bullish".
'Extended period of
Chicago wheat meanwhile
gained 0.2% to $7.93 ¾ a bushel for March, helped by the extent of the net
short position, and by some ideas that rain in the US Plains, where winter
wheat seedlings are struggling with dryness, will not prove plentiful.
"Light rain/snow is expected to fall in portions of the
southern Plains," Benson Quinn Commodities said.
"This event is expected to be followed by another extended
period of dry weather, while temperatures are expected to cool off
In Paris, March wheat added 0.4% to E254.50 a tonne, but London
wheat for May, in minimal volumes, dropped 0.6% to £213.85 a tonne.
Among soft commodities, New York arabica coffee bought into the gains, adding 0.3% to 147.00 cents a
pound for March, helped by a more positive stance to the bean from Barclays.
Barclays cited prospects for a weaker Brazilian harvest next
year, and the potential for a rash of short-covering of speculators lofty net
short position in the bean.
But New York raw sugar for March dropped 1.2% to 19.02
cents a pound, undermined by confirmation of shipments by India, which unveiled
a formal export order.