firm, but couldn't end that way, as strong results from the early harvest trumped
putative concerns over the impact of a debilitating disease.
The talk over "sudden death syndrome", or SDS, which
Agrimoney.com highlighted on Friday hit the mainstream.
In Chicago, Richard Feltes at RJ O'Brien noted "reports of
soybean SDS", while in Minneapolis, CHS Hedging flagged that "sudden death
syndrome has been found in Illinois and Missouri soybeans".
Also in Minneapolis, Benson Quinn Commodities noted that "talk
of 'sudden death' in the soybean crop is gaining more attention".
(The syndrome is actually a fungal disease, which can cause
substantial yield losses, if often not proving as serious as its name.)
However, if that encouraged some early short-covering on
soybean futures, investors felt encouraged to put in fresh sales by the strong
yield reports issuing from the early US harvest.
At Allendale, Paul Georgy noted harvest reports from Mississippi
at 75-90 bushels per acre, and Louisiana at 65-100 bushels per acre, ie in some
areas more than twice the national average that the US Department of Agriculture
is factoring in.
Richard Feltes, noting 96 bushels-per-acre soybeans in
Yazoo, Mississippi, and talking of "unbelievable record yields", said that the
results were likely to put the brakes on any rallies.
Indeed, it somewhat took the wind out of the sails too of investors
hoping that frost fears might keep prices of soybeans, and corn, supported.
In fact, while "there is still a freeze premium in the
market", weather models "do not indicate any cold air moving into the [Midwest]
crop areas over the next two weeks," Darrell Holaday at Country Futures said.
And "once we get past September 18-20 area, it will become a
moot point", with crops too mature to be seriously affected.
As an extra negative, Fintec Group noted talk of Chinese
soybean crushers "not being able to receive letters of credit open for 4-5
soybean cargoes", besides rumours that one or two Brazilian soybean cargoes had
been resold, an echo of what went on earlier in 2014.
Soybeans for November fell 0.4% to $10.23 ¾ a bushel, a fresh
contract closing low, although there was
enough concern over near-term supplies to lift September soybeans 1.0% to
$10.85 ¾ a bushel.
After all, September soymeal
soared 7.2% to $416.50 a short ton.
"US processor margins are extremely favourable for those plants
that can source soybeans," Terry Reilly at Futures International said, noting
that "there are now no soymeal truck offers at several locations across the western
Corn fared a
little better, holding its ground at $3.65 a bushel for December delivery, against
a background of yield reports which, while favourable, were not so outlandish
as for soybeans.
"Corn yields are coming in at 170-190 bushels per acre" in
the Delta states, Allendale said.
Weekly ethanol data held some cause for optimism too, even
while revealing production down 24,000 barrels a day to 913,000 barrels a day
Inventories plunged 934,000 barrels to 17.32bn barrels,
indicating demand for the biofuel.
It also took some of the attention away from a downbeat
price forecast by Bill Tierney, at AgResource, who forecast an average corn
price of $3.40 a bushel this year, and said prices could drop below $3 a bushel
from 2015-16 to 2019-20.
Ukraine tensions rise
Again, corn found some support from wheat too, as the Ukraine concerns revived on news that pro-Russian
rebels had entered Novoazovsk in the south east of the country, amid claims of
fresh incursions by Russian troops too.
Oleksander Danylyuk, an adviser to Ukraine's defence
minister, said that the country was "increasingly facing genuine Russian
soldiers in addition to mercenaries armed by Russia on the other fronts in the
Donetsk and Lugansk regions".
With Ukraine a major exporter of competitively-priced wheat,
the wheat market has been something of a barometer of regional tensions.
However, the threat from the move into Novoazovsk may be
particularly acute in that it edges rebels closer to Mariupol, an important
port for trade in goods including grains.
There is growing concern too over the threat posed by harvest-time
rains to the quality of the US spring wheat crop.
While some regons are drying out "from last week's deluge",
which should enable an acceleration in harvesting at least, "many areas are
still dealing with a sloppy track", Benson Quinn Commodities said.
Richard Feltes noted "reports of soaring Minneapolis wheat
protein premiums as concern mounts that the hard red spring wheat crop will not
meet high protein specifications demanded by millers.
"Even light weekend rains are worrisome to spring wheat
merchants and millers."
Still, it was Chicago soft red winter wheat, the speculator's
favourite, which outperformed, adding 1.0% to $5.62 ¼ a bushel, in what looks a
sign of Ukraine factors proving the trump card.
In Paris, wheat for November closed up 0.4% at E173.50 a
tonne, retaking its 20-day moving average.
Among soft commodities, New York cotton added 0.8% to 67.46 cents a pound for December delivery, its
best finish in a month, lifted by continued ideas that last month's sell-off
went too far.
Furthermore, there has been talk of weather threats for US cotton,
ranging from ideas of excess rains in south east states where crops are sensitive
now that bolls are open, to undue dryness in Texas.
But raw sugar
went back into retreat, shedding 0.8% to 15.58 cents a pound, after its gains
in the last session on a downgrade by Unica to expectations for the Brazilian
Centre South cane harvest.
Talk turned more to the International Sugar Organization
idea of another world production surplus in 2014-15, and ample world supplies.
"The market seems to be waiting for the nearby physical
oversupply to be clearly dealt with," said Tom Kujawa at Sucden Financial.