Bears lost a little bit of their grip on agricultural commodities,on oilseeds at least, which
found the oomph to escape the downdraft which has held them for the last month.
Thursday proved to be a broadly positive day for commodities
anyway following positive jobs and factory orders data from the US, and a renewed
pledge by the European Central Bank that it stands ready to buy bonds if
On the wider spectrum, the CRB commodities index finished 1.3%
On the narrow one signally for Chicago watchers, a low-profile
crop seen as a leading indicator, oats,
enjoyed a strong day, ending 2.1% higher at $3.70 ¾ a bushel for December
Still, it was on soybeans
that traders were really focused, to see whether October 4 could again bring a
rebound, as it has had an uncanny knack of doing so in the past.
"Today is the seasonal/historical day that soybeans and
soybean meal are to be bought," US Commodities said.
So it was, with Chicago's November lot ending up 1.2% at
$15.51 ½ a bushel, and not just for reasons of history.
For one, oil
prices, a key influence on commodities such as soyoil used in making biodiesel, were underpinned by the clash
between Syrian and Turkey forces.
(For that matter, gold
touched its highest level in a year just shy of $1,800 ounce amid a continued
influx of investment interest.)
'Very strong number'
But there were reasons within the oilseeds complex too, not
least a storming week for US exports, with sales coming in at 1.3m tonnes,
ahead of forecasts of at best 900,000 tonnes.
"This is a very strong number," Darrell Holaday at Country
"With all of the talk about increased yields," or at least
of the US harvest proving less bad than feared, "the most important fundamental
aspect of the soybean market is the strong demand".
US Commodities said: "The stage is set for larger supplies versus
a larger demand, adding that "thus far no signs of rationing are occurring in
the soybean exports or crush".
And there was unexpected support from north of Chicago, in
Canada, where officials estimated the domestic canola crop at 13.4m tonnes - well below expectations of a
figure of some 15m tonnes.
Disease and poor weather had taken their toll, Statistics
Canada signalled, sending prices of the oilseed itself 1.0% higher in Winnipeg,
to Can$606.50 a tonne.
In Paris, rapeseed
for November delivery soared 3.6% to E482.50 a tonne for its first positive
close of the week.
But could the benefit feed through into other crops?
Bears did find the strength to bring corn back from earlier highs to a negative finish, down 0.5 cents at $7.57 a bushel.
The grain had been helped by export sales of 327,000 tonnes
which, while nothing to write home about in historical terms (a year ago the
figure was 1.3m tonnes) were bumper by recent standards.
Indeed, they were the best for eight weeks, and eased some
of the demand doubts fostered by soft ethanol data on Wednesday.
And some movements in spreads had helped too.
"One of the important fundamental signals in the corn and
soybeans is the inversion that we have now seen develop between December and March
corn contracts and November and January soybean contracts," Mr Holaday
"This is always a strong fundamental signal as it is an
indication of cash strength."
In fact, more ominously, the March corn contract ended 0.25 cents above the December one.
But Chicago wheat,
which had looked set for a stronger day, after climbing back above its 50-day
moving average on a continuous chart, faltered after its own export sales
proved disappointing, at 309,000 tonnes.
Furthermore, the United Nations focused investors' eyes on
the likelihood of a far bigger harvest of the crop next year, with an upbeat
report on winter crop sowings.
And although Commonwealth Bank of Australia is poised to cut its forecast for the Australian wheat crop, investors kept prices on the
Chicago's December lot finished down 0.5% at $8.69 ¼,
while London wheat ended down 0.2% at £199.05 a tonne for November delivery.
Paris wheat for November bucked the trend, closing up 0.9%
at E260.25 a tonne.
'Upwards momentum exhausted'
Bears were in charge of the soft commodities, led by coffee as improved weather forecast in
Brazil triggered heavy fund long liquidation of New York arabica futures.
Arabica futures for December finished down 3.3% at 175.05
cents a pound, touching a one- week low.
Concerns over dry weather in Brazil had led futures to their
best since July on Tuesday. However, higher prices have eked out sales by
Sucden Financial said it didn't "want to get too bearish as
it could be a trap and as we know aggressive moves in either direction are
But it appeared that the "sheer weight of the origin selling
will continue and the upwards momentum now must be exhausted".
dropped a further 2.0% to £1,532 a tonne, adding to the last session's 2.2%
decline amid improving supply estimates from the Ivory Coast.
Commerzbank analysts said that the "the main reason for this
pressure is the brighter crop outlook", with the main harvest just beginning in
top producer Ivory Coast, and expected to produce more than 1.0m tonnes, not
far below last season's result.
"A far more severe downturn was originally expected owing to
the lack of rain."
Still, "despite the improved harvest prospects, the global
supply deficit should still be greater than the year before", the bank added.
"Consequently, we expect cocoa prices to recover."