Monday didn't start off as exactly the busiest day on
agricultural commodities, with the benchmark US markets closed.
But what movement there was was mixed, despite the broadly improved
sentiment towards many risk assets for 2013, which has been underpinned by
optimism over US and Chinese economies.
It has to be said that there are nuances in the idea of a "risk
on" theme, with some assets being preferred over others.
"I continue to question the overall fund involvement in the
ag sector as multi-year highs in the equity futures and solid upward momentum
in the energy complex have the potential to take preference over the ag sector,"
Kim Rugel at Benson Quinn Commodities said.
After all, ags "didn't treat them very well in 2012", she
added, uncertain "whether or not the trade is ready to commit to holding new
length at these prices".
But the US Department of Agriculture cuts 10 days ago to estimates
for domestic corn and wheat stocks at the close of 2012-13
have allowed grains, and oilseeds, to make up for a poor start to 2013.
Indeed, managed money, a proxy for speculators, put on a stack
of long positions on the grain in the week to last Tuesday, latest regulatory
The net long in Chicago futures and options rose 26,736 lots
over the week, the Commodity Futures Trading Commission said late on Friday.
In soybeans, speculators
raised their net long position by more than 6,000 contracts.
Soybeans vs grains
Chinese markets, which were open on Monday, reflected thos
better sentiment, with Dalian soybeans for May rising 0.5% to 4,827 yuan a
tonne, while May soyoil added 0.9%
to 8,714 yuan a tonne.
But grains proved less robust, with corn falling 0.3% to
2,457 yuan a tonne, and May wheat on the Zhengzhou falling 0.9% to 2,563 yuan a
Also to factor in to Chinese prices were import data for
2012, for which the headline was of huge corn imports, which near-trebled to
5.2m tonnes, an all-time high, and rice, for which they quadrupled to 2.3m
tonnes, also a record.
For wheat, the rise was of 195% to 3.69m tonnes, the highest
for eight years.
However, the December data itself was not so strong for
grains, falling 53% to 266,000 tonnes for corn, while heat's halved to a
nominal 5,527 tonnes.
Palm import data less
The firm performance in Dalian soyoil also fed through into
the market for palm oil, of which
China is a major importer – especially in the run-up to the Lunar New Year
festivities starting next month.
Although have Chinese importers restocked already? Data from
cargo surveyor SGS showed Malaysia's palm oil imports down 19.9% so far this
month, from the same period of December.
Rival Intertek put the drop at 17.3%
Stlll, these were at least improvements of mid-month figures
of a 22% drop, according to SGS, and 20.7% decline, as measured by Intertek.
Kuala Lumpur palm oil for April gained 0.6% to 2,414 yuan a
Elsewhere, in Tokyo, rubber
for June eased 0.3% to 310.60 yen a kilogramme, a decline attributed to
profit-taking after a falling yen boosted hopes for Japanese exports of goods
Rubber remains amongst its highest levels for nine months,
and up 50% from tis August 2012 low.
At Phillip Futures, Ker Chung Yang also cited the role of
improved Chinese growth ideas in boosting the tyre-ingredient, with China the
Still, natural rubber imports last month were reasonable but
not huge, at 211,351 tonnes, up 3.2% from December 2011, a little below the
overall rate of increase in 2012 of 3.6%.
(Interestingly, synthetic rubber imports fell 9.8% last month
and 0.5% over 2012 as a whole, reflecting relatively low natural rubber prices.)
However, Chinese sugar
imports showed a steeper decline last month, of 46% to 268,362 tonnes,
contrasting with a rise of 28% over 2012 as a whole, and appearing to bear out
ideas of a reduced need for foreign supplies following strong domestic beet and
(Associated British Foods on Friday forecast a drop in its
Chinese sugar profits this year, thanks to reduced prices stemming from better
Zhengzhou sugar for May fell 0.9% to 2,563 yuan a tonne.