weren't holding out much hope for a boost in Chinese buying, now the major importing
country is back from its lunar new year holidays.
London prices of the metal eased below $8,100 a tonne
earlier for their lowest level of the month.
But Chicago soybean
investors took an altogether more upbeat stance, returning from a long weekend
(US markets were closed on Monday for President's Day) to see the March
contract gap higher.
(That is – the contract's lowest point so far on Monday is
clear, if by less than 1 cent a bushel, of the high point of the last session.)
The contract hasn't gapped higher since September – although
of course, there is still plenty of Monday to go yet.
And if the US Department of Agriculture does not later in the
day reveal a US sale to China, the top soybean importer, there is always scope
As Benson Quinn Commodities noted, "new China demand will
hold key to the week's price direction.
"New demand, even purchases from South America," the rival
exporter, where harvest is bringing supplies online, "will offer support while
lack of reported sales will pressure the markets."
Also helping the March contract's gains were ideas that the
rain over the weekend in Argentina fell short of expectations, meaning less
refreshment for parched soybean, and corn,
As weather service WxRisk.com noted, "one could make the
argument that the rains over central, eastern and northern Argentina were
somewhat below expectations.
"There were some areas which did get a significant amount of
rain, but it was not the uniform widespread coverage that the models were
That said, there was not universal agreement on this point.
Rival MDA said that "weekend rainfall was near expectations".
(Of course, it depends what your expectations are.)
"Widespread showers occurred in Santa Fe, Santiago Del
Estero, western Buenos Aires, Entre Rios, Cordoba, La Pampa, and Chaco", of
0.25-1.0 inches, with coverage of up to 85%.
"Showers will further improve soil moisture across most
growing areas aiding soybean and late corn filling. Cooler weather will improve
growing conditions as well," MDA added.
Soymeal vs soyoil
Still, one point that the weather services did agree on was
that there is more rain heading to areas of central Brazil where precipitation
has already left farmers struggling a bit to get their corn and soybean crops in
– and so get supplies to port for export to the likes of China.
That was another help to US soybean prices, which rose 1.7% to
$14.48 ½ a bushel for the March contract, as of 08:45 UK time (02:45 Chicago time).
Signally, the new crop November lot added a more modest 1.1%
to $12.75 ½ a bushel.
Also noteworthy was the outperformance of soymeal, which added 2.1% to $417.50 a
short ton for March, over soyoil,
which gained 0.9% to 52.07 cents a pound (a dynamic reflected in prices on
China's Dalian futures exchange too).
US domestic soybean crush data released on Friday showed January
soymeal exports at 1.12m short tons, up from 801,245 in December and the largest
monthly figure since December 2009.
Soyoil stocks, meanwhile, came in at 2.82bn pounds, a rise
of more than 200m pounds from December, above market expectations, and the
highest figure since March 2011.
'Trend remains down'
Could corn get a
boost from South American weather too?
Lacking the export demand side of the picture – US corn
shipments are forecast at multi-year lows in 2012-13 – the grain could not keep
up with soybeans.
Furthermore, it retains a lingering hangover from its
10-session losing streak, matching the longest since 1965, which only ended on
"The trend remains down - while the daily momentum studies
have turned higher, weekly momentum studies continue to offer a negative tone,"
Benson Quinn Commodities said.
While Chicago's March lot did score one technical victory,
in rising back above $7 a bushel, traders remained wary over whether this
psychologically-important level has actually been secured, taking the lot to
$7.01 ¾ a bushel, a gain of 0.4%, rather than jumping further.
Indeed, even these gains required a helping hand from fellow
grain wheat, which in Chicago added
0.5% to $7.46 a bushel for March delivery.
Luke Mathews, at Commonwealth Bank of Australia, flagged the
"supportive" US export sales data released on Thursday, which showed "long-awaited
improvement", to more than 700,000 tonnes.
Less positive to prices was US rain/snow over the weekend
which "was above expectations", according to MDA, so boosting prospects for
drought-pressed winter wheat seedlings.
Still, heading into the end of the month, the outlook is
And speculators may be reluctant to press wheat too hard,
given the sizeable net short position they have already built up in the grain,
helping lead it to seven-month lows last week.
That thinking was one support for New York raw sugar too, in which speculators
have built up a near-record net short position, of more than 25,000 lots, in
futures and options combined.
Furthermore, there are improved ideas of demand at prices
near a two-year low.
Mr Mathews flagged "thoughts that the recent decline in
prices will uncover fresh consumer demand", noting that Iraq, the world's
third-largest importer, purchased 200,000 tonnes of white sugar last week.
Meanwhile, sellers in Thailand, the second-ranked exporting
country after Brazil, are believed to be curtailing sales because of the weak
New York's March lot jumped 1.2% to 18.22 cents a pound.