So if the last trading day of January did not bring selling,
as month-ends often do by repute in agricultural commodities, does that mean
that the start of February would not spark month-beginning buying?
The overarching concern in grain and oilseed markets
remained South American weather rather than the calendar, and conditions which are
bringing central Brazil strong rains, delaying harvest and interrupting crop
flows to port, and southern Brazil and Argentina not enough moisture,
'Crop stress will continue'
In the last session, corn
and soybean prices ebbed and flowed
with every change in the thinking of unexpected thunderstorms in Argentina.
"Heavy rains fell over north west Cordoba into the western
San Luis with amounts over 2.0 inches," with lesser precipitation over some
other parts of central Argentina, (and none at all in many areas), weather
service WxRisk.com said.
Did it change significantly crop prospects?
World Weather said that the moisture was "not enough for a
lasting increase in soil moisture", adding that "crop stress will continue".
'Heat dome developing'
As for what lies ahead, WxRisk.com said that "weather models
continue to show a heat dome developing over Paraguay and northern and central
Argentina" which will last until "early next week and then begin to break down".
"As long as this heat dome is in place, Paraguay, all of
central and northern Argentina and south eastern Brazil will see little
significant rain, and that is why the weather models show no significant rains
and most of these areas the next five days."
And even after that Rio Grande do Sul in southern Brazil "stays
mostly dry, as does all of Argentina".
At broker Benson Quinn Commodities, Kim Rugel said: "Dry
weather over the next 10-15 days for Argentina comes during key flowering and
pod setting for central soybean producing regions.
"The market will be keenly attuned to any changes in outlook
for next weekend."
There was enough worry, anyway, to give bulls the benefit of
the doubt, at least until the next runs of the weather models.
Also potentially moving markets later will be updated Informa Economics estimates on South American crop production.
And soybeans had extra support from demand too, after data
on Thursday showed US weekly export sales of the oilseed rising 28% week on
week to 1.25m tonnes, with a further 220,000 tonnes, bought by China, for
2013-14 revealed through the US Department of Agriculture's daily alerts
"Total sales over the past four weeks are running 89% above
last year's pace, with most of the sales headed to China," Luke Mathews at
Commonwealth Bank of Australia said.
And, sticking with China, Chen Xiwen, director of the
Chinese Communist Party's top policy making body for rural affairs, said that
the country would not impose further curbs on food imports this year.
"We should use both international and domestic markets to
ensure farm product supplies and we should not go back to closing the
gates," Mr Chen said, in comments closely watched for giving an insight
into China's new government.
'Position is more
Soybeans, of which China is the top importer, rose 0.5% to
$14.75 ¾ a bushel, for the Chicago March contract.
Signally, that took the lot just above its 100-day moving average,
which it has not closed above for three months.
Corn, which China is seen becoming an increasingly important
buyer, and which is now comfortably back above all its major moving averages, added
0.3% to $7.43 a bushel for Chicago's March contract.
Hopes for a recovery in US ethanol use from their lowest on
record last week also helped.
"With ethanol margins improving slightly, the cash market
for corn is also holding strong, supporting the spot contract," Joyce Liu at
Phillip Futures said.
She added: "Both US and global stocks-to-use position is
more precarious for corn than for soybeans, so adverse crop weather," as being
seen in South America, "is likely to support corn more."
'Not driven by fresh demand'
It was wheat
again which lagged.
Weekly US export sales, at 388,000 tonnes down one-third
from the eight-week average, did not help.
"The $0.50-a-bushel, or+5%, rally in prices from January 9-22
was clearly not driven by fresh physical demand, raising concern about the
likely longevity of the stronger prices," CBA's Luke Mathews said.
Furthermore, Chicago's March wheat lot has a relatively poor
technical outlook remaining above only its 10- and 20-day moving averages.
The contract stood 0.2% higher at $7.81 ¼ a bushel, its
premium over corn now well below $0.40 a bushel and counting.
Among softs, cotton,
having proved the top gainer among crops, and indeed all major commodities, in
January with a 10.5% rise, opened the new month with a more negative attitude.
New York's March lot fell 0.6% to 82.43 cents a pound.
US export sales of 137,000 running bales in the latest week,
the lowest figure since October, have questioned whether consumers are willing
to pay the higher futures prices.
"US futures are up more than 8 cents a pound over the past
few weeks, but physical buyers have not chased the market higher," Mr Mathews
The export data signally included 11,100 bales in
cancellations of Chinese orders, the first since July, and muffling any signal from
Mr Chen about open import policy in China, the top buyer (producer and
consumer) of the fibre.