Turnaround Tuesday on grain markets transformed into
Groundhog Day, as early gains evaporated, leaving futures to chalk up a fresh
series of contract lows.
Actually, bulls emerged with some honour, as old crop August
soybean futures felt some further support from 120,000-tonne US sale to China
announced on Monday, closing up 0.7% in Chicago at $11.84 a bushel.
In Paris, rapeseed
for November bounced 2.0% to E322.25 a tonne, filling in a chart gap left by a
tumble in the last session, when French co-operatives were said to be in
Ditto, milling wheat
for November which gained 1.0% to E178.00 a tonne for November, amid growing
concerns over the extent of rain damage to the European Union harvest,
including the French crop, the bloc's biggest.
Besides the comments from Europe reported by Agrimoney.com, the
EU quality concerns are making waves in the US, with Richard Feltes at Chicago
broker RJ O'Brien for instance, reporting that "the wet EU wheat harvest
weather could drive more high quality wheat business to the US".
In Kansas state, Darrell Holaday at Country Futures said
that "there are some EU weather concerns developing which is putting in some
support in for better quality US wheat".
In Minneapolis, Benson Quinn Commodities said: "Wet
conditions continue to plague wheat harvest in portions of the EU, which is
putting more focus on quality."
Not that this appeared to make much of a difference to
investor thinking, as they returned to liquidation mode, encouraged by yet
further talk of huge US corn and
"Can the national corn yield be 185 bushels per acre?" Paul
Georgy at broker Allendale said, citing a figure well above the record 165.3m
bushels per acre that the US Department of Agriculture is factoring in.
The USDA figure is widely seen as an underestimate, with
considerable talk of 170 bushels per acre, and even a little above.
Mr Holaday said it was "not very difficult to get to" a
yield estimate of 171.5 bushels per acre, but that it is "also fair to say that it may
be hard to get to a number over 175 bushels per acre".
'Will become much
Whatever, it wasn't
the kind of talk to get buyers excited, and signal a floor to prices, even when
some cracks are emerging in ideas of perfect US corn and soybean growing
"If we don't see better rain than is projected in the next
five days in the Plains and western Midwest, the rains later next week will
become much more critical for the soybean crop," Mr Holaday said.
Mr Feltes said that the weather outlook "leans positive" for
prices, in showing a "drier tone to the western US over the next 10 days".
Still, any weather setbacks would occur at a time when the
condition of US crops is at historic highs - for corn and soybeans at least, if
not for cotton.
Huge soymeal orders
In Chicago, corn for December closed down 1.0% at $3.68 ¼ a
bushel, a fresh contract closing low, and boding ill for the kind of scenario
of weaker agriculture growth rates which DuPont cautioned of.
The old crop September contract ended down 1.0% at $3.60 ¼ a
bushel, a fresh four-year low for a spot contract.
In soybeans, the new crop November lot ended down 1.3% at
$10.57 ¾ a bushel, a contract closing low.
This despite the USDA's confirmation of talk of buyers
around for soymeal, with export
sales of 225,000 tonnes of the feed ingredient for 2014-15 to "unknown destinations",
and a further 180,000 tonnes to Vietnam.
Mr Feltes, said that the orders represented a "clear
indication" that importers are locking in US supplies amid "heightened
uncertainty over the reliability of the world's largest soy product exporter",
Argentina, which has only just settled its latest strike threat in the
The strong soymeal orders also tallied with an observation
from Oil World that the high protein feed ingredient is, thanks to pricing differences,
set to gain in popularity at the expense of grains.
"Given the magnitude of potential supplies and the resulting
pressure on prices, world consumption of eight major oil meals is likely to be
boosted to a record," Oil World said.
"This will occur again under the lead of soymeal, which is
expected to garner market share from other oil meals and also from feed grains
if prices are attractive."
Soymeal certainly didn't shirk from its task of trying to
improve its competitiveness, falling 1.5% to $346.80 a short ton in Chicago for
December delivery, despite the US export orders.
Nor did wheat
allow soymeal to gain too much ground, falling 1.0% to $5.24 ½ a bushel itself in
Chicago for September delivery.
Sure, the European wheat harvest is proving disappointing on
quality, but US wheat still faces the pull of lower prices of fellow grain corn,
and some weight from the US harvest too.
Besides, the Wheat Quality Council has begun its US spring
wheat tour which will doubtless underline the fine condition of that crop too.
Among soft commodities, forecasts of rain in drought-hit
Brazil were blamed for a decline of 2.7% to 168.30 cents a pound in New York arabica coffee futures for September
Raw sugar for October
eased too, ending down 0.7% at 17.16 cents a pound, on profit-taking from the
last session, even though, at Commerzbank said, Brazil's rainfall "is expected
to disrupt harvesting this week".
But New York cotton
for December added 0.3% to 67.91 cents a pound, helped by deterioration in the US crop, and showing signs of stabilisation after its fall to contract lows
earlier in the month.