Agricultural commodity bulls faced an uphill battle on
Thursday, with markets generally taking something of a negative tone.
The, small, decline in the US economy identified earlier in
the week, coupled with the prospect of a key American jobs report out on
Friday, quelled appetites for risk, and sending shares down 0.7% in London and 0.9% in Paris.
Wall Street stocks were 0.2% lower in late deals, while the
CRB commodities index lost 0.3%, with copper, for instance, closing down 0.7%
in London after touching a three-month high.
'Showers started showing
And grains and oilseeds faced the added pressure of rains in
Argentina and southern Brazil, where dryness is threatening what had been high
hopes for corn and soybean harvests.
"The soybean market came off the early overnight highs when
showers started showing up on the Argentine radar, Darrell Holaday at Country Futures
"The forecasts had called for the rain, but they were
slightly heavier than expected."
Benson Quinn Commodities said that "support from
follow-through buying early in the overnight session was offset by reports that
better than expected rainfall was taking place in portions of Argentina.
"Initial reports indicate that some areas may have received
up to 1 inch of moisture, which would definitely benefit areas that may have
experienced a little stress.
"Intermittent rainfall is expected through the balance of
today and into tomorrow as the system slowly works its way into southern Brazil."
'Stressed area should contract'
"The stressed area should contract to 30%, versus 40%
currently," Iowa-based broker US Commodities said.
As an added pressure on prices, US weekly export data for
grains were viewed as disappointing, coming in at 252,000 for corn, at the
bottom end of the range of forecasts, as were wheat's at some 380,000 tonnes.
But bears did not hold all the cards.
US export data for soybeans were better received, coming in
at 1,253,000 tonnes, old crop and new, twice some forecasts.
Furthermore, there are concerns in some parts of Brazil over
too much rain, which is hampering the early harvest and hampering transport to
"Some traders are more excited about too much rain in Brazil
where bean harvest is being delayed," Paul Georgy at broker Allendale said.
Benson Quinn said that "near term", it found "the
possibility of additional US soybean sales due to slow harvest progress in
Brazil more supportive than the potential reductions to South American soybean
And Country Futures' Darrell Holaday clocked talk "that
early yields in Brazil are below expectations", but added that "we would be
cautious with those thoughts", with such rumour open to manipulation.
Corn vs soybeans
That helped limit the decline in Chicago's March soybean lot
to 0.7%, leaving it at $14.68 ½ a bushel.
And corn gained
support from its greater sensitivity to Argentine heat, with soybeans viewed as
a more resilient crop, and having their sensitive development period a little
US Commodities said: "The rains in southern Brazil will not
aid the corn - it is too far along. The rain will greatly aid the soybeans."
Chicago corn for March gained technical support too in
finding support at the $7.35-a-bushel level viewed as a key chart point.
The contract managed to recoup early losses to close up 0.25
cents at $7.40 ½ a bushel, staying above its hard-won 75-day and 100-day moving
Wheat found no
such support, closing in Chicago down 1.0% at $7.79 ½ a bushel for the March contract,
whose premium over shrank to less than $0.40 a bushel.
Much was seen as technical selling, with the grain being on
the end of short wheat, long corn/soybean bets.
Indeed, the data defied some positive news, with the US
winning Taiwanese import trade, and revealed as sending 167,000 tonnes of wheat
to the European Union this week under quota, the biggest volume so far in
With other signs of buying around, such as Iraq seeking
offers, Paris wheat did better, closing unchanged at E244.75 a tonne for May delivery.
Tale of two beans
Among soft commodities, New York cotton for March edged 0.01 cents lower to 82.95 cents a pound
after US export sales of the fibre disappointed, coming in at 137,000 running
bales, the lowest in nearly three months.
But robusta coffee
maintained its upward progress, helped by a rebalancing of the Rogers
International Commodity Index in favour of the bean over New York-listed peer
Furthermore, trade data from the International Coffee
Organization showed demand for robusta clearly more robust than that for
arabica on export markets.
Exports of robusta soared 24% to 46.6m bags in 2012, while
shipments of arabica beans eased 0.8% to 66.5m bags.
London robusta coffee for March rose 2.1% to $2,009 a tonne, while March arabica beans eased 0.5% yo 146.95 cents a pound.