US markets may not have reopened after the July 4 holiday
But the broadly downward trend in prices remained intact.
Rubber future in
fact tumbled 4.2% to 203.00 yen a kilogramme in Tokyo, undermined in part by
the reversal in oil prices from June highs, with crude the raw material for synthetic
There are also concerns over demand in China too, the top
consumer of the tyre ingredient, accounting for more than one-third of world
use, and which imported 2.47m tonnes of natural rubber last year.
China, as of Friday, had 149,047 tonnes of rubber in stock
at warehouses monitored by the Shanghai exchange, a sizeable amount, if among
the lowest in five months.
In Kuala Lumpur, palm
oil dipped in and out of negative territory, standing down 1 ringgit at
2,401 ringgit a tonne as of 09:15 UK time (03:15 Chicago time).
Again, softness in crude is a negative factor, with
biodiesel a large source of palm oil consumption.
Firmness in the ringgit is hardly helping either, making
Malaysian exports such as palm oil that much less affordable for buyers in
The currency on Friday touched its strongest since November against
the dollar, of 3.1790 to $1.
As for the Chinese markets, these were hardly too
encouraging either, with January soybeans
down 0.6% at 4,311 yuan a tonne on the Dalian exchange, their weakest finish in
nearly two months.
ended down 1.5% at 3,299 yuan a tonne, its worst finish since mid-April.
Such moves will hardly reassure over Chinese soybean
crushing margins, and demand from the top soybean importing country.
And some soft commodities fared even worse.
Sugar, of which
China is also a large importer, slumped by 3.5% to settle at 4,784 yuan a tonne
for January delivery, on the Zhengzhou exchange.
Data from the Chinese sugar association show sugar sales in
major producing regions down 24% so far in 2013-14 (starting in October) to 7.9m
tonnes, implying rich inventories.
Cotton, a major in which China is a particular focus, given
a change in the farm subsidy regime, sank by 1.5% to 14,605 yuan a tonne on the
Zhengzhou for January delivery, a contract closing low.
'Fears regarding quality'
Still, the news on markets is not all so negative.
Agritel highlighted the potential damage to advanced
European cereal crops from a band of rains which, besides slowing combines, is
threatening some quality downgrades.
"While rainfalls during the last two days can be considered
beneficial for corn development,"
with corn spring sown and in its growth phase, "fears are reinforced regarding
the quality aspects of other cereals", Agritel said.
Rain on ripe grain can encourage sprouting and protein
'Large differences in
"Precipitation is expected to last for several more days and
abundant rain might harm [crops] particularly in Eastern Europe," Agritel said.
INTL FCStone has also raised concerns over Eastern European
wheat quality, as highlighted by Agrimoney.com last week.
Meanwhile further west in France, Agritel warned that barley quality "might decline this week
due to recent rainfalls".
Paris-based Agritel added: "Producers of durum wheat once more face quality
concerns that might lead to large differences in price depending on the
'Situation is most
Further rain is certainly in the forecast for France, the
top EU wheat producer, with MDA saying that "showers should build across eastern
France and south eastern [European] areas this week".
There is some concern over wetness in Canada too, which is
proving too extreme for some spring crops, if proving beneficial in some other
"The current situation in Canada is most critical in certain
regions," Agritel said.
"Fields are under water and spring plantings might suffer
lasting damages, especially canola,"
as Agrimoney.com reported on Friday.
Still, on a more positive note for canola/rapeseed production, Strategie Grains
raised its forecast for the EU rapeseed crop by 700,000 tonnes to 22.5m tonnes,
although it has to be said that figure had been floating around in the market
US weather outlook
Weather is particularly in focus in the US, and whether
crops will remain under a largely benign influence (bar too much flooding in some
areas) which has whetted expectations for a record soybean crop and potentially corn
In fact, there has been little change in the US outlook over
the weekend, according to MDA, with no sign of damaging heat which would
threaten the sensitive corn pollination process, which is beginning to start in
In fact, for now, "the lack of notable heat in the Midwest
Corn Belt will favour crop conditions", MDA said.
"Beneficial showers in the north east Midwest will increase
moisture for corn and soybeans."
Still, as far as winter wheat goes, "showers in the far
western Plains will slow winter wheat
harvesting", the weather service said.
On the demand side, there are some signs of life at the
current lower price levels, with Jordan on Monday tendering again for 100,000
tonnes of hard wheat, while Turkey has tendered for 235,000 tonnes of milling wheat
and 200,000 tonnes of barley.
Turkey has suffered a particularly poor grains harvest,
thanks to persistent drought.
On technicals, updated data on investor positioning showed hedge
funds returning to reducing their net long position in agricultural commodities
as of the week to last Tuesday, with corn and soybean holdings taking a
In soybean futures and options, the net long is now at its
lowest since December 2011. Could hedge funds prove reluctant to sell down the position further?