Grains and oilseeds made a, just about, positive start to
But will optimism stick around?
External markets are likely to have a say, and in particular
the dollar, which soared 0.8% in the
last session, putting dampeners on prices of many commodities.
A stronger dollar, which was boosted by ideas that the US
central bank may curb its ultra-easy monetary policy, makes dollar-denominated
assets less competitive as exports.
The greenback stood 0.2% higher as of 10:00 UK time (04:00
But so will some crop-specific data expected later, including
the latest US crop estimates from Informa Economics – amid ideas that acreage
losses to last year's drought may not have been as large as some bulls have
been pencilling in.
There has been widespread thinking that the US Department of
Agriculture will next week, in its monthly flagship Wasde crop report, lift
from 9.5% its estimate of last year's corn
crop cut for silage, or abandoned altogether, because of the drought.
In the drought year of 1988, the figure was 14.0%.
But there is "mounting sentiment that the idea that the USDA
is overstating 2012 harvested corn area may be flawed", Richard Feltes at RJ O'Brien
The change in view was "in view of the early harvest, the prompt
filing of crop insurance claims and the ample time officials had to revise
harvested area" in previous Wasde reports.
'Will any business
Also due later are weekly US crop export sales data,
expected to show some recovery in the soybean
figure, to 250,000-450,000 tonnes, from 87,000 tonnes the week before, when data
were depressed by Chinese cancellations.
(Thursday's cancellations, unveiled through the USDA's daily
reporting system, will not show up in weekly data until next time.)
For corn, export sales are seen at 200,000-350,000 tonnes,
up from 104,000 tonnes, with wheat's
at 350,000-550,000 tonnes, representing quite a retreat from the 1.0m tonnes
the week before.
Investors are closely watching to see if recent price falls are
stimulating exports, a sign that the correction may have gone far enough.
"Will any business show up soon?" Mike Mawdsley at Market 1
Investors appeared not that confident of positive data, in
grains especially, in early deals, wary of the late pullback in the last
session, blamed on fund selling, seemed to set the trend for this one.
"The severely oversold conditions of all three US wheat
markets should trigger more substantive short-covering than we have seen thus
far," Brian Henry at Benson Quinn Commodities said.
But the "technical structure of the wheat market isn't
offering much reason to cover short positions
"While the possibility of additional short-covering is
present, the trade seems more interested in looking for signs that the market
will be able to absorb another round of fund selling."
Fundamental news was mixed.
Ideas of benign South American weather gained support from
Buenos Aires grains exchange data late on Thursday showing that, thanks to
drier weather, farmers have caught up on soybean plantings, which are now 84.9%
On corn, seedings have reached 82%, 1.5 points behind last
year's pace. But that is a lag far smaller than seen in previous weeks, when
heavy rains kept machinery from fields.
However, more helpful to corn was talk that Nonghyup Feed, South
Korea's largest animal feed maker, having initially barred US supplies from its
latest tender, recanted.
Nonghyup Feed is believed to have bought 69,000 tonnes of
optional US or South American origin at $308.66 a tonne from Cargill, besides bought
60,000 tonnes of South American feed wheat from Glencore at $331.00 a tonne.
'No real protection'
Meanwhile, fears remain for the risk of winterkill to Black
Sea winter wheat, which in some areas has braved winter cold with a thin snow blanket
which only looks to get thinner with a, temporary, thaw.
"The thaw of the main production areas in Ukrainian and Russian
should gradually fade," bringing new frosts, consultancy Agritel said.
"The thaw has led to a significant reduction in the thickness
of the snow cover in the south eastern regions of Ukraine and in the Rostov and
Krasnodar regions of Russia, leaving no real protection for cultures before the
arrival of a new cold episode.
"The temperatures should remain tolerable in the coming
days. However, producers will monitor changing conditions as the cold may
intensify in the coming days."
Grains vs softs
Wheat for March stood 0.1% higher at $7.56 a bushel in
Chicago, but up 0.3% at $8.13 ½ a bushel in Kansas.
Chicago March corn was 0.25 cents higher at $6.89 ½ a
bushel, with March soybeans up 0.4% at $13.90 ¾ a bushel.
But such modest gains were more than soft commodities could
manage, with New York raw sugar for
March down 1.1% at 18.90 cents a pound.
The drop comes amid ideas that the US renewal of biodiesel
tax credits will reduce the need for Brazilian cane ethanol imports, an
alternative for filling to mandate for so-called "advanced" biofuels.
"The passing of the tax credit should lower the cost of
biodiesel to a point where the RIN benefits of sugarcane ethanol will no longer
pencil versus biodiesel and in doing so will also increase demand for US corn-based
ethanol," Benson Quinn's Brian Henry said.
"Although this will not happen overnight it would be fair to
expect imports of Brazilian ethanol to steadily decline in the coming months."
Ideas that Brazilian mills will in 2013 switch more of their
cane to ethanol, rather than sweeteners, has been a major hope for sugar bulls.