If there is any pre-weekend profit-taking going on, well, it
hadn't made much of a dent on grain prices, at least, in early deals.
New York raw sugar
found headway more difficult, as investors continued to be tempted to take
profits on prices at their highest since April, while weighing up latest data
from Unica on the Brazil Centre South cane crush.
The October lot was 0.1% higher at 22.48 cents a pound at
08:40 Uk time (03:30 New York time, 02:30 Chicago time).
Indeed, the data actually showed the top sugar-producing region,
in the top sugar-producing country, increasing its output of the sweetener in
the second half of June, to 1.8m tonnes, from 1.37m tonnes in the first half –
if still down some 30% year on year.
"The general theme was that better weather allowed
harvesting to improve in the most recent period, but output still lags last
year's crush by a considerable margin," Luke Mathews at Commonwealth Bank of
'A hot map'
However, grains continued to attract premium to account for the
weather threat to US corn and soybean crops whose yield prospects
were massively downgraded on Wednesday in US Department of Agriculture
And after all, the Midwest weather outlook is hardly looking
as promising in precipitation terms, as it did earlier in the week.
The last run of the ECMWF model "shows a hot map" on the
six-to-10 day horizon, WxRisk.com said.
"The big upper low in the jet stream over eastern Canada moves
east, out to sea.
"This in turn allows the heat dome to come east back into
the Plains by July 19, the Midwest by July 20, and Midwest July 21," the
weather service said.
"Temperatures could be as hot as 95-100 degrees Fahrenheit east
of the Mississippi river and 100+ over the central and Upper Plains."
So, as Mr Mathews put it, "the main drivers of grain markets
– that is supply concerns for US and former Soviet Union grains – remain
unchanged", with estimates still being cut for Russia and the Ukraine too.
(Agritel may later today release downgrades for both
countries' grains harvests.)
Furthermore, there was continued comment at the relative strength
in US export sales data released on Thursday.
"The USDA's export data released yesterday indicated strength
in corn exports despite high prices," Lynette Tan at Phillip Futures said.
"June export figures hit two-month high, with Japan and
Mexico being the top two importers.
"In addition, top corn importers China and South Korea are
already booking larger shipments in anticipation of possible supply problems
and even higher prices."
Chicago corn for December added 1.2% to $7.41 a bushel,
helping wheat for September add0.9%
to $8.54 a bushel.
However, offering some hope to bears from a chart
perspective, that was still insufficient to take them above peaks earlier in
"A short-term top may be in place for a bit," Mike Mawdsley
at broker Market 1 said, if adding that "it appears the corn damage is far
greater than most can grasp at the moment".
Indeed, this time, soybeans
just about managed to keep up, having been set back of late by a reluctance
among funds to add more long positions
to an already huge net long position.
"Large funds are long near 200,000 contracts, which is
closing in on record length of 224,822 held on May 1," Kim Rugel at Benson
Quinn Commodities said.
"The market appears to be is running out of fresh players
willing or wanting to add new long positions."
However, this may be only a temporary phenomenon, with the
drop in the soybean: corn price ratio (November: December contracts) to below
2.1, from 2.6 a month ago, appearing unsustainable.
"Once the technically overbought picture has been corrected,
beans remain the bullish stalwart of the complex, with USDA struggling to maintain
pipeline stocks to a declining production outlook," Rugel said.
The November soybean lot added 0.9% to $15.42 ½ a bushel.
The rise came despite data showing economic growth in China, the top importer of many commodities, including soybeans, falling below 8% in the April-to-June quarter for the first time since 2009.
However, many analysts believe a pick-up is likely later in the year.