If there was one thing that wheat bulls did not need, it was a poor number for weekly US export
sales of the grain.
But they got one anyway.
The US sold 229,200 tonnes of wheat in the week to last
Thursday, the lowest number of 2013-14, by a margin, and well below expectations
of a figure of at least 350,000 tonnes.
There was scope for investors to be charitable, with last
week including the Thanksgiving holiday, and so expected to prove a little
light on business.
But after upgrades to Australia's crop on Tuesday and Canada's
on Wednesday, well, charity did not stretch too far, leaving Chicago's March
contract with a close of $6.52 a bushel – matching the lot's lowest ever finish,
and representing drop of 1.4% on the day.
It little helped that the United Nations Food and
Agriculture Organization upgraded its estimate for the world harvest above 710m
tonnes, a record, and apparently an estimate formed before the Australian and
Canadian upgrades, implying it is open to a further rise.
While Minneapolis spring wheat for March did a little better
than its Chicago peer, falling 1.1% to $6.85 a bushel, that still represented
the contract's lowest finish on record, and only came after a steep drop in the
last session on the Canadian data.
Canada's wheat crop is, in the main, spring sown.
Paris wheat for January fell by a relatively modest 0.6% to
E211.75 a tonne, given some support by solid European Union exports, at 572,000
tonnes for the week.
Indeed, the figure trounced the 369,400 tonnes that the US
actually exported last week.
Wheat's fall put a bit of pressure on corn too, the two being rivals in feed rations.
But corn was also, still, under the microscope after the Chinese
rejection of cargoes of US imports on grounds that they contain an unapproved
genetically modified variety, Syngenta's MIR 162.
That may actually mean delays, rather than cancellations.
"There is talk that the Chinese will look to delay future
shipments from the US under the idea that the GMO trait in question would be
approved for Chinese feed channels," Benson Quinn Commodities said.
At broker RJ O'Brien, Richard Feltes said: "I hear reports
that Chinese corn buyers are trying to delay US corn shipments in hopes that
MIR 162 will be approved early next year."
Ethanol powers ahead
Still, concerns were allayed somewhat when the US Department
of Agriculture unveiled weekly US corn export sales of 593,600 tonnes, within
the range of market expectations, and including 362,600 tonnes sold to China.
futures soared again, adding 1.3% to $1.885 a gallon for January delivery, the
highest close for a spot contract in three months, and implying wider margins
for biofuel plants when corn prices are near three-year lows.
The January contract is up 11% so far this month (ie, in the
last four sessions).
Chicago corn fell, but not by as much as wheat, ending down
0.7% at $4.33 ½ a bushel for March delivery.
That was at least enough to stay above the contract's 10-day
and 20-day moving averages, key technical pointers.
'End of the buying
Nor could soybeans
manage gains, despite some decent weekly US export sales, of 805,000 tonnes, well
within the range of expectations, and a further 110,000 tonnes announced to China
through the USDA's daily alerts system.
The problem was that this order was for 2014-15.
And China, the top soybean importer, featured little on the
weekly data, with San, Mexico and the Netherlands leading the pack of buyers.
"The soy complex senses the end of the Chinese soy-buying
frenzy [of US supplies for 2013-14] with only 6,500 tonnes of old crop US
soybeans sold to China in the most recent reporting week," RJ O'Brien's Richard
Furthermore, planting conditions remain benign for South
In Brazil, where the forecast is for dry conditions "with a
few light showers on Saturday and heavier amounts on Sunday", the outlook is "favourable
for soybeans as planting finishes up", US Commodities said.
In Argentina too, "conditions are favourable for soybean
development and planting".
Meanwhile, Argentina may prove a tougher competitor on export
markets for now, with talk that Argentina may temporarily reduce its soy export
taxes to encourage growers to sell rather than store as a hedge against
(Extra sales of course mean extra taxes for the government.)
Argentine farmers are holding 11.5m tonnes of soybeans,
according to newspaper Cronista
Soybeans for January edged down 0.1% to $13.28 a bushel.
Among soft commodities, robusta
coffee fell 0.7% to $1,686 a tonne in London, for January delivery, pressed
by ideas that the squeeze on supplies which is supporting values may prove temporary.
Furthermore, its arabica
peer tumbled 2.2% to 106.00 cents a pound in New York for March delivery on
fresh evidence of the revival in Colombia's output, as trees mature that were
planted in a programme to increase the spread of rust-resistant varieties.
Colombia harvested 1.1m bags of arabica beans last month, up
45% year on year, according to the National Coffee Growers' Federation.
Sugar's losing streak
Cotton for March
eased 0.3% to 78.85 cents a pound in New York.
Weekly US export sales, at 248,640 running bales of old crop
and 18,040 running bales for 2014-15, were OK, but the USDA bureau in Beijing
threw a downer at the market by estimating China's imports this season at a
relatively low 2.2m tonnes (10.1m bales).
However, New York raw
sugar rose – only 0.01 cents, but an increase – to 16.69 cents a pound for
March delivery, after an 11-session losing streak.