If the last session was about a revived dryness threat for
the US winter wheat belt, this one was about quite the opposite.
Ideas grew of rain next week for the southern Plains winter
wheat belt, which has been struggling with drought, as official US data on
"While weather models aren't in very good agreement for the
next couple of weeks… the EU model indicates decent rains next week in the
southern plains," Benson Quinn Commodities said.
And, after all it is "getting to the point that rains over
much of this region matter".
US Commodities said that "near-term forecasts are helping to
alleviate some of the dryness concerns in the Plains states.
"The northern and eastern Plains may get showers in 11 to 15
days, particularly central Kansas, reducing areas in the region under moisture
stress to 50% from 65%."
And this after parts of Kansas, Oklahoma and Texas "received
0.25-0.75 inches of rain yesterday", the broker said.
CHS Hedging said that "recent rains over southern hard red
winter wheat areas seem to have offered some damage control".
'Looking to square
The impact was to fuel profit-taking in wheat, which some funds already seemed to be thinking of given the
prospect of key data on Monday, when the US Department of Agriculture unveils
estimates for US crop sowings and for quarterly grain stocks, as of March 1.
The latter report series, in particular, has a rich history
of causing huge market moves.
"Overnight trade had the feel of a fund community that is
looking to square positions ahead of the report," Benson Quinn Commodities said.
While there was some evidence of demand, with Tunisia buying
50,000 tonnes of milling wheat, half at $316.74 a tonne and half at $318.74 a
tonne, that was likely sourced from the Black Sea, traders said.
Wheat for May stood down 1.9% at $6.97 ¼ a bushel in Chicago
with some half an hour's trading to go.
Paris wheat for May was 0.6% lower at E210.25 a tonne,
Corn did better,
adding 0.5% to $4.94 ½ a bushel, with reasons from corn-wheat spreading to the
prospects for a sluggish opening to US spring sowings, thanks to cold soil
temperatures, seen as behind the rise.
Gains in corn prices this week "reflect mounting concern
over prospects for a late start to the US planting season," Richard Feltes at
broker RJ O'Brien said.
And soybeans gained
too, by 0.2% to $14.39 a bushel, as another day passed without confirmation of
significant cancellations by Chinese buyers, but with bulls battling price-negative
talk from Argentina.
"Argentine soybean and soy meal basis levels have weakened
in search of a trading partner," Benson Quinn Commodities said.
"Early harvest results and the firm tone of late in the
soybean market is triggering producer selling."
It was left to soft commodities to show real gains, with arabica coffee for May soaring 2.0% to
179.95 cents a pound in late deals in New York.
The bean has been rescued from ideas of strong producer
selling – Brazil's Cooxupe world's largest coffee-growers co-operative, earlier
this week said its farmers had raised bean sales by 44% so far this year to
2.2m bags – by data from showing a drop in Central American coffee exports.
Shipments fell 5.8% year on year last month to 2.347m bags, Anacafe
said, a reflection of the outbreak of coffee rust.
Also supporting prices was that "current forecasts for
Brazil call for mostly dry conditions for the next week," Jack Scoville at
Price Futures said.
Raw sugar for May
was up 0.6% at 17.97 cents a pound, despite a somewhat downbeat outlook on prices
from Sucden Financial.
Besides the dry Brazil weather outlook, the sweetener gained
support from rising prices in India, which may put a squeeze on the country's
exports despite the country's, controversial, export subsidy.
"India remains a wild card for exports," Mr Scoville said.
As an extra boost, Brazil's GVO gave weight to El Nino
concerns by saying it was starting its cane harvest early in case heavy rains
(which the weather pattern typically brings Brazil) start later in the year.