Chicago investors have been reluctant to stick their necks
out too far in early deals ever since, on Monday, seeing an early rally, based
on crop tour results, founder.
Caution reigned early on Thursday too, with the knee-jerk
reaction to take profits after the rally of the last session, but with some
reluctance to take the trend too far.
As an extra reason for investors to tread warily, external
markets were a little negative, with shares closing down 1.0% in Tokyo, 1.2% in
Seoul and 1.1% in Sydney, amid nerves ahead of the central bank get-together in
Jackson Hole, starting on Friday.
The prospect of an Italian bond auction, of E6.5bn, later is
also a focus for attention, in taking the temperature of eurozone debt jitters.
face their own crucial meeting on Friday too, when farm officials in Russia
discuss grain supplies, a session seen as potentially heralding measures to
curb grain exports, a move which would likely tip neighbouring Ukraine into copycat
measures to avoid its silos getting ransacked by importers instead.
"Expect Ukraine to implement some type of tariff structure,
if the Russian implement a shift in export policy," Benson Quinn Commodities
"It appears Ukraine has exported 1.2m tonnes of wheat during
July and August, roughly twice the amount sold during the same period last year."
And the growing ideas of demand remain alive too, with Taiwan
tendering for 55,000 tonnes of US wheat from the US, extending the run of buying
interest this week from the likes of Saudi Arabia, Jordan and Tunisia.
"There are good tenders around the world," Mike Mawdsley at
Market 1 said.
Furthermore, there is continued fretting about Australia's
wheat prospects, following dryness.
"On the wheat front, be advised that the trade will be
increasingly sensitive to September rainfall prospects across Australia where
private sector 2013 production forecasts are already 2m-3m tonnes below US
Department of Agriculture's August forecast," Richard Feltes at RJ O'Brien
"The wheat market is already nervous over eroding 2013 wheat
production prospects across the European Union and former Soviet Union amid
renewed reports of disappointing wheat yields in Germany, Siberia, Kazakhstan
and the Urals area."
Rains where they
However, there was enough on the negative side of the ledger
to keep investors from getting carried away.
Prospects for India's monsoon have improved, with rainfall
in the next two weeks set to top averages, according to the state-run Indian
Institute of Tropical Meteorology.
Then there is the Hurricane Isaac rain which, while a threat
to many standing crops such as corn
and cotton and to an extent soybeans, is improving soil
moisture ahead of US winter wheat seedings.
And the market had some nerves too over the US export sales
data later, which have taken on increasing importance as a sign of the extent
to which rationing has kicked in at higher prices.
For wheat, sales are seen at least matching the previous
week's 475,000 tonnes, old crop and new, and potentially hitting 600,000
For corn, 250,000-450,000 tonnes are expected, in line with the
325,500 tonnes last time.
Soybean export sales are pegged at 600,000-800,000 tonnes,
compared with 718,700 tonnes the previous week.
Furthermore, Friday is the last trading day of the month, a
time when investors often tidy up positions and withdraw money from the market,
with month beginning associated with cash injections.
Wheat, the leader in the last session, fell, but hardly steeply,
down all of 0.3% at $9.03 a bushel for December, but signally remaining above its 20-day moving average, at a little $8.96 a bushel, regained in the last session.
Corn, for which Hurricane Isaac is an extra setback,
threatening ear falls and lodging besides slowing harvesting, dropped 0.1% to
$8.13 a bushel for December delivery, again staying over its 20-day moving average, at $8.10 a bushel.
November soybeans eased 0.4% from the last session's contract closing high to stand at $17.45 ¾ a bushel.
Blowing on bolls
Volatility was hardly the watchword among soft commodities
either, although New York cotton for December added 0.5% to 77.00 cents a
pound, as investors injected some premium in case of damage to the US crop from
Isaac, dropping rains of up to 20 inches, is working its way
through many of the main cotton-growing states, at a time when boll-opening
renders crops vulnerable to damage.
Raw sugar for October dropped 0.3% to 19.70 cents a pound, extending
losses of the last session, as improved hopes for India's monsoon raised hopes
for its cane harvest too.