The absence of US markets for the Martin Luther King holiday
cast a soft tone over most markets Monday with lighter volumes reflecting the
The German DAX share
index stood down 0.3% near the close while the French CAC was off a slightly a
smaller 0.3%. The UK FTSE 100 bucked the
trend to eke out a small 0.1% gain.
The broadly weak tone in equities reflected the negative
finish to Asian markets after a run of economic data from China proved slightly
softer-than-forecast as industrial production and fixed asset investment missed
In addition the data showed China's economy grew by 7.7% in
the final quarter of 2013, slightly above forecast, but again reflecting
China's plans to move away from state led growth as well as rein in the nation's
The euro stood up
0.2% against the US dollar in late
Elsewhere in the commodity complex gold was up 0.2% at
$1,256 an ounce, reflecting the dollar, signs of slowing liquidation from
institutional investors as well as strike threats by South African miner
Brent crude stood down 0.3%, having slipped
in reaction to the Chinese economic data.
"come up black"
futures reached fresh multi-year lows Friday prices for the sweetener saw a
modest short covering rise at the start of this week.
"The sugar roulette wheel has finally 'come up
black' and broken the run of 'red' which has had been almost
unprecedented," said Tom Kujawa, co-head of softs at Sucden Financial.
Despite today's gains, sentiment over the general
outlook for sugar remains negative over the medium-term.
Price hopes have been undermined by strong late-season
production in Brazil and ideas of decent supplies in Thailand, the
second-ranked exporter, and India.
Indeed analysts at Australia & New Zealand Bank
suggest the recent bearish sentiment would "typify" the outlook for
2014 with gains above 17 cents a pound to be "hard fought" amid
further supply gains, notably in Brazil.
At Sucden, Mr Kujawa said: "There is little it seems
out there in the ether other than the generally low prices, large fund net
short positions and holiday season which is contributing to the bounce."
The latest figures from the Commodity Futures Trading
Commission showed hedge funds extended their net short holdings in sugar in the
week to January 14, by more than 16,000 contracts to 52,306 lots, the biggest
such position in nearly six months.
White sugar futures for March delivery stood up 0.4% in late London trade
at $413.80 a tonne.
The steadier tone in sugar prompted similar gains in the
other soft commodities.
stood up 0.8% in London at £1,744 a tonne.
"Short-term, we expect further consolidation
around £1,770-1,780 a tonne area," suggested Myrto Sokou, senior research
analyst at Sucden Financial.
Mr Sokou noted: "Further gains could focus on the
£1,788 level, while modest resistance holds near 1800 area," while
adding a breach of the technically important 40-day moving average "opens
potential for further losses toward £1,700 area, which acts as modest
Cocoa prices have taken a more positive tone since
their initial dip in early January, with prices supported by strong grind
results from the EU and hot, dry weather conditions around the Ivory Coast
"The overall fundamental picture should support
generally strong prices as the supply situation should be tight on strong
demand for the longer term," suggested Jack Scoville, vice president at
the Price Futures Group.
Coffee price followed
the positive trend, with London robusta
futures closing up 0.6% at £1,720 a tonne for March delivery.
Expectations of higher supplies kept wheat prices on a back footing Monday with European wheat futures
extending to their lowest in over three months.
Kernel Holding earlier revealed a 22.5% increase in grain
sales over the October-December quarter, to a record 1.3m tonnes. The surge reflects Ukraine's record high harvest
and stronger exports from Russia.
March milling wheat
futures stood down 0.8% in Paris at E191.00 a tonne near the European close.
London feed wheat futures were down a larger 1% at £152.50 a
While the recent price correction has piqued fresh demand
from buyers, however the recent purchase of US wheat by Egypt has
surprised many, sparking speculation of increased competition.
"We now have a situation where all the various regions
of supply are about in balance when delivering into North Africa which means
that the competition is even greater", noted a major European commodity
Last week's price weakness, as futures fall to a three-year
low for a spot contract of $5.60 ½ a bushel, prompted speculators to curb
their bearish bets.
The net short position amongst managed money player in
Chicago wheat fell more than 16,000 contracts to stand at -56,482 lots.
China soy gains
Aside from wheat activity in the grain sector was limited
with the absence of US markets.
Prices in the soy sector saw modest gains overnight, adding
to those seen last week amid strong Chinese demand expectations.
for May delivery posted a 1.1% on the Chinese Dalian exchange overnight,
closing at 4,733 yuan a tonne.
Similar gains were recorded in the exchanges Soybean meal
and soybean oil futures.
Reflecting the bullish outlook hedge funds extended their net
long holdings of Chicago soybean futures last week, adding 18,713 contracts to
a total 126,371 lots.