Agricultural commodity investors were not expecting fireworks
on Monday, with US markets closed for the President's Day holiday.
And they were not disappointed.
The general markets background was actually helpful, with
Chinese lending data deemed supportive, in showing aggregate financing, the
broadest measure of credit available, rising to 2,580bn remninbi last month
from 1,200bn remninbi in December, and showing a small year-on-year rise.
The data eased concerns over authorities clamping down hard
"The January credit numbers show that the firming-up of the
monetary stance is a gradual, balanced exercise, not an aggressive one," said Louis
Kuijs, chief China economist at the Royal Bank of Scotland.
were, broadly, firm, with London stocks soaring 1.1%, after decent rises in
Asia too, where Shanghai shares rose 0.9%, Sydney stocks 0.5% and Tokyo shares
And as an extra help to dollar-denominated
commodities, the greenback remains amongst its lowest levels of 2014 against a
basket of currencies, and down more than 5% from highs in July last year.
A weaker dollar underpins prices of dollar-denominated
exports, such as many commodities, by making them more affordable to buyers in
But if the background to commodities was broadly helpful, sugar got an extra boost from further comments
on the damage to the cane crop in Brazil's main producing region, the Centre
South, from the recent dry spell.
Unica, the cane industry group, said that the 2014-15 Centre
South cane harvest, which begins in April, now looked like showing no growth
from last season's 596m tonnes.
The dryness had likely damaged 35m-40m tonnes of cane, Unica
With analysts have expected a harvest of at least 600m
tonnes, that helped white sugar for
May end 0.6% higher at $442.20 a tonne in London.
May signal nearby
At broker Sucden Financial, Nick Penney also highlighted
signs of potential demand in a "stable" white sugar market at the end of last
week, noting that its premium over raw sugar "remained firm" at nearly $90 a
"This may signal nearby demand," he said, with white sugar
often more sensitive to immediate consumption, being capable of filling an
immediate gap in demand, with raw sugar needing processing first.
Other soft commodities were firm too, with robusta coffee for May gaining 0.7% to
$1,818 a tonne in London, boosted by the firm finish to the last session for
its New York peer, arabica coffee.
Cocoa for May
ended up 0.2% at £1,858 a tonne, underpinned by ideas of firm demand.
Grain markets were more mixed, with wheat easing 0.1% to E198.25 a tonne in Paris for March delivery.
FranceAgriMer removed a little bit of reason for risk
premium late on Friday by pegging the French winter wheat crop at 75% "good" or
"excellent", up from 66% a year ago.
Meanwhile, it was Germany, rather than France, which won
plaudits as regards exports with talk that it will ship 195,000 tonnes of wheat
to Iran this month, up from 119,000 tonnes in February last year, and some
250,000 tonnes believed to have been traded last month.
'Struggle to go much
London wheat for May at least managed to hold its ground in
closing at £154.25 a tonne, as traders continued to ruminate on last week's unexpectedly
strong UK import data.
Traders at one major European commodities house, talking of
milling wheat, said that "it's not so much that the imports are actually
cheaper than UK wheat, or better quality - with a tighter supply the mills are
finding it difficult to buy UK wheat in quantity without pushing up prices
"On the other hand, they can buy a 5,000-10,000 tonne cargo
of imported wheat without the market reacting at all."
This does imply that "UK milling wheat prices will struggle
to go much higher from here, in spite of the seemingly tighter supply", the
Among oilseeds, rapeseed,
an oil-heavy crop, took heart from the best close for palm oil in Kuala Lumpur in 16 months, up 0.7% at 2,682 ringgit a
Paris rapeseed for May gained 1.4% to E388.25 a tonne, also
gaining technical support, having closed the last session above its 200-day
moving average for the first time in a year.