As the world's biggest economy takes a holiday, the second
largest returns from one.
Indeed, the reopening of China after the week-long lunar new
year celebrations has been keenly awaited by agricultural commodity bulls,
bringing a large buyer of crops such as cotton,
rubber and soybeans back into the market.
How big will China's appetite be, with the festivities
behind it, and where will it source from?
For soybeans, there is an idea that, with Brazil's export
supplies beginning to come on tap in earnest from its recently-started harvest,
Chinese buyers will prefer South America to the US for orders for the next few
'The key to price direction'
"New China demand will hold key to the week's price direction,"
Kim Rugel at US broker Benson Quinn Commodities said.
"New demand even purchases from South America will offer
support while lack of reported sales will pressure the markets."
There was little in early news on Monday (when US markets
are closed for President's Day) to give investors clues either way.
What was gained from Chinese futures market looked neutral.
The Dalian's best-traded September soybean contract fell 1.1% to 4,782 yuan a tonne, while the May lot
eased 0.8%, proving more resilient that Chicago's March contract, which fell
1.8% last week while Chinese markets were closed (although this comparison does
not take account of currency tweaks).
for September dropped 2.7%, and the May contract 0.6%, also outperforming
Chicago soymeal for March, which fell 3.1%.
But soyoil fared
better in Chicago, where it edged higher last week by 0.4%, than on the Dalian,
where it lost 1.2% for September delivery, to 8,646 yuan a tonne, and 1.0% for
'Buoyant palm oil'
Indeed, there was something of a theme of firm vegetable
oils on Monday, with palm oil for
May up 1.2% at 2,535 ringgit a tonne in Kuala Lumpur as of 09:00 UK time.
"The edible oil was buoyant after cargo surveyor Intertek
Testing Services reported an 18.1% increase in Malaysian palm oil exports for
the first half of February from a month ago," Ker Chung Yang at Phillip
Futures, the Singapore-based broker, said.
Rival cargo surveyor Societe Generale de Surveillance put
the figure at 13.6%.
That has helped counter market disappointment at the
Malaysian government's decision to lift its crude palm oil export tax for March
to 4.5%, from effectively 0% for the first two months of 2013.
The extent of Malaysian inventories, which hit a record in
December, and a relatively slow pace of exports, sent palm oil prices to a two-year
low towards the end of 2012, a worry to the country given the importance of the
vegetable oil to its rural economy.
Rubber loses bounce
However, another major Chinese import, rubber, could not in Tokyo's late session hang on gains of the
previous one, attributed to a weakening of the yen, so making yen-denominate
exports that much more affordable.
Rubber for July dropped 0.3% to 323.30 yen a kilogramme,
with Mr Ker noting the temptation among traders to take profits.
This, despite a further drop in the yen on Monday, was
especially tempting given a fall in Shanghai rubber futures, which for September
delivery dropped 3.1% to 26,215 yen a tonne.
Tokyo shares did
better at holding on to bullish sentiment, boosted by the yen's decline, which followed
a statement on Friday from the G20 meeting which failed to single out the
country for criticism over what some might term "competitive devaluation of the
(This devaluation, which favours Japan's important exports,
does follow a long spell when the currency has, on some measures, been
Tokyo stocks closed up 2.1% at within 1% of a four-year
However, without the prospect of US trading today stocks
struggled for direction in Europe, easing 0.2% in London in early deals and
0.3% in Paris, but gaining 0.1% in Frankfurt,