Month beginnings by repute bring buying on grains markets.
But it is by no means an obligation.
Indeed, corn stood
0.2% lower at $3.64 a bushel in Chicago for December delivery as of 09:20 UK
time (03:20 Chicago time), returning closer to contract lows set earlier in the
The long US weekend for Labor Day, which saw the country's markets
closed on Monday, failed to bring any sign of a big deterioration in the
weather – namely an alert of frost on the near-term horizon to stop crop
Certainly, the six-to-10 day outlook for the Midwest "is
cooler overall", weather service MDA said, but that does not mean unduly cold
Indeed, the northern areas, such as North Dakota, with the
coolest outlooks on Friday now show a slightly warmer outlook on the MDA map.
And there is no great expectation either of weekly US Department
of Agriculture crop progress data later showing any significant deterioration in
the US crop.
Furthermore, speculators have plenty of scope for adding
further short positions in Chicago corn futures and options, with the net long
at 67,593 lots, as of Tuesday last week, compared with a net short of more than
180,000 lots reached in October last year.
The same is not so true for soybeans, in which hedge funds already have a net short, of nearly
22,000 contracts, the most since 2006.
And as an extra reason for investors to be wary about
getting too negative on the oilseed for now, the results of China's weekly soybean
auction showed a large uptick in demand, with 132,135 tonnes (39.2%) of the soybeans
on offer sold at today's event.
That compares with 30% last week, and figures of 24%, 23%,
19.2%, 27%, 15.5%, 16.9% and 27% for the previous weeks.
The price achieved, of 4,125 yuan a tonne, was only 1 yuan
lower week on week.
On China's Dalian exchange, soybeans for January gained 0.8%
to 4,627 yuan a tonne, one of the contract's best closes.
And elsewhere in the oilseeds complex, palm oil gained a touch too, adding 0.1% to 1,930 ringgit a tonne after
data from cargo surveyor Intertek showed Malaysian palm exports falling 4.8%
While hardly an inspiring figure, it at least showed a
slower rate of decline than earlier in August, indicating some late-month
pick-up in volumes.
Earlier, palm oil dropped to a fresh five-year low of 1,914 ringgit
Back in Chicago, rival vegetable oil soyoil for December added 0.3% to 32.22 cents a pound, while
soybeans themselves for November delivery gained 0.4% to $10.28 ½ a bushel.
The question for wheat
investors was whether the grain could take any further strength from the worsening
crisis in Ukraine, or indeed the continued delayed US spring wheat harvest.
Certainly, there is even less sign of any accord in Ukraine,
with the country upgrading its conflict against pro-separatist, Russia-backed
rebels to one against Russia itself.
Even German chancellor Angela Merkel said that the fighting
was a "conflict between Ukraine and Russia".
As for the US harvest, MDA said that "spring wheat
harvesting will experience delays in the [US] Northern Plains and [Canada's] southern
Prairies" in the six-to-10 day outlook, after some scattered showers at the
weekend, and further such rainfall expected this week.
Still, there is some doubt as to how much the US spring
wheat crop has been affected yet.
US Wheat Associates said that, so far, the crop is coming in
with average protein content of 13.6%, "equivalent to last year's final average
of 13.6%", with a test weight of 61.5 pounds per bushel (80.9 kilogrammes per hectolitre)
not far below last year's final figure of 62.3.
The Hagberg falling number is "average is over 400 seconds,
indicating a sound crop at this time".
Minneapolis spring wheat dropped 0.3% to $6.27 ¾ a bushel,
while Chicago soft red winter wheat, the world benchmark, lost 0.3% to $5.61 ¾ a
Among soft commodities, robusta
coffee nudged higher again in early deals, adding 0.1% to $2,083 a tonne in
London, for November delivery, after yesterday's data showing a steep drop in
exports from Sumatra, the major Indonesian producing region.
But raw sugar did
even better, soaring 0.8% to 15.62 cents a pound for October delivery, despite
a 100,000-tonne cut by Thailand, the second-ranked sugar exporting country, to
the quota on the amount of the sweetener reserved for domestic use, meaning
more available to sell elsewhere.
The quota was cut to 2.4m tonnes, lifting hopes of the
country achieving its forecast exports of 8.8m tonnes in 2014, up from 6m
tonnes last year.