So, the US Department of Agriculture's Wasde crop report was
not exactly a fillip for bullish sentiment, as reported elsewhere on Agrimoney.com.
"The USDA provided a lot of numbers and not one of them
could be seen as supportive" to grain prices, said Darrell Holaday at broker
"It does not mean that they were all bearish, but there was
not one number that inspired any buying."
So it was down largely to weather worries to give futures a
chance of a positive close.
"The market faded off of the report, but the midday GFS
[weather model] was slightly drier than the morning run and that has supported the
market on price breaks," Mr Holaday said.
Winer wheat misses
Indeed, corn futures
for July closed up 0.6% at $3.87 ¾ a bushel, the contract's best close in three
months, after another volatile session, albeit in lower volumes than the last
futures for July added 0.4% to $9.41 ½ a bushel, less affected by US weather woes,
but gaining extra support from a separate announcement by the USDA of the sale
of 201,000 tonnes of US crop to an "unknown" import destination for this season.
That cheered investors, given that "unknown" was likely
considered to be China, for which there have been worries of cancellations of
US import orders, or at least a switch in fresh business to South America.
Winter wheat did
crumble under the weight of its extra stocks – with dry US weather, after all,
beneficial for harvest of the crop.
But spring wheat,
under threat from northern Plains drought, kept up its headway, adding 0.4% to $6.06
½ a bushel for July delivery, the best finish for a spot contract since July
Still, on the losing side, cotton underperformed even winter wheat, dropping 1.1% to 75.69
cents a pound in New York for July delivery, a two-month closing low, after the
Wasde failed to lift the estimate for US exports in 2016-17 from 14.5m bales,
as some commentators had expected.
And the forecast for US export in 2017-18 was downgraded by
500,000 bales to 13.5m bales, "as higher anticipated foreign production is expected
to reduce global import demand".
Indeed, the estimate for world production in the new season
(which will start in August) was raised by 1.5m bales to 114.7m bales on "higher
estimated planted area" in China, Mexico and Pakistan.
"Chinese officials are reporting a moderate increase in
planted area, specifically in Xinjiang and Hebei provinces with favourable weather
conditions across cotton regions," the USDA said, lifting its forecast for
China's harvest by 500,000 bales to 24.0m bales.
And the resulting upgrade of 670,000 bales to the forecast
for world cotton stocks at the close of 2017-18 was deemed downbeat for prices.
Still, the new crop December contract lost a more modest
0.8% to 72.49 cents a pound, lacking the imminence of the expiry process, like
the old crop July contract.
'Wet weather hampered
Raw sugar put in
a weak performance too, to end an otherwise solid week, settling down 0.5% at 14.27
cents a pound, undermined by fresh weakness in the real, which dropped 0.7% against the dollar, so weakening the value
in dollar terms of assets in which
Brazil is a big player.
The fall came despite a market survey by Platts showing that
investors expect data early next week from Unica on the cane crush in Brazil's
key Centre South region to show a 9% tumble year on year in the second half of
"Wet weather has hampered crushing activities," said
Platts Kingsman analyst Claudiu Covrig, adding that ATR, the concentration of
sugars in cane, has "still to recover".
Still, with more cane being turned into sugar rather than
ethanol, output of the sweetener is seen taking a smaller drop, by 6% to 1.59m
However, arabica coffee
fared better, nudging 0.2% higher to 126.55 cents a pound in New York for July,
protected from the falling real and Brazilian harvest pressure by some cold
"The weather is still cause for attention of market players,"
said the Conselho Nacional do Café producers' group, flagging a forecast from Somar
Meteorologia that the "advance of a mass of polar air over the weekend, between
the northern Rio Grande do Sul and the west of Santa Catarina, will decrease
Further north in the key coffee-growing state of Minas
Gerais, plantations above 1,000m altitude in the region of Pocos de Caldas will
see minimum temperatures of 0-2 degrees Celsius, although a foecast wind "reduces
the possibility of frost", the CNC said.
Still, cocoa fared
best, rocketing 4.6% to £1,605 a tonne in London for July delivery, reflecting largely
a boost from weaker sterling, after the UK general election resulted in a
loss in overall majority for the Conservative Party, and signalled the potential for political trouble
Nonetheless, there was more to the rise than currency, with New
York cocoa futures for July gaining 2.0% to $2,020 a tonne
Jack Scoville at Price Futures noted that "the harvest is
basically over for cocoa in West Africa and this has helped relieve selling
pressure on futures.
Also, "traders look for demand to improve as lower prices filter
down to the retail level".