PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 20:02 GMT, Thursday, 16th Mar 2017, by William Clarke
PM markets: corn and soy futures gain in broad-based rally

The weaker dollar unlocked some broad based buying in commodities, with corn and soybean benefiting, but weak export sales sapped the strength from the wheat market.

"We've had commodities almost as a whole oversold, and so we're getting some bargain buying, and finding support around all commodities today," said Steve Georgy, at Allendale.

"Fresh grain news is lacking but market finding support after the fed rate hike decision," noted Kim Rugel, at Benson Quinn Commodities, with the dollar plumbing five-week lows against world currencies.

Dollar extends declines

"Today's trade is consolidative with firmer macros and weak dollar supportive," Ms Rugel said.

On the face of it, the decision by the Federal Reserve to raise interest rates was supportive for the dollar, but given that that move was considered a done deal ahead of time, markets bought the rumour and sold the fact.

In addition, the tone of Janet Yellen yesterday was seen as downplaying the possible number of rate hikes to come this year.

Strong corn sales

Corn export sales were buoyed by better than expected US weekly export sales, which came in at 1.26m tonnes.

This was well above expectations, which range between 700,000 and 1.0m tonnes, the highest sales number in seven weeks.

May corn futures settled up 0.8%, at $3.66 a bushel.

Soybeans break losing streak

Support from corn, and some decent export sales, helped May soybean futures snap an eight-session slide, after the contract put in its lowest close in four month's last session.

Soybean export sales were reported at 472,000 tonnes, in-line with analyst expectations.

May soybean futures settled up 0.4%, at $100.01 a bushel.

"The $10.00 mark has been good to soybeans, providing support despite expectations South American crops could still be getting larger," noted Mr Cronin.

Ample supplies

Wheat export prospects got a fillip late yesterday from big Egyptian buying, with ideas that cash-strapped Egyptians are favouring state subsidised bread over other foods, driving up demand.

But the truth is that big demand is running into ample selling, and high fright prices meant that US wheat was out of the running, despite being the cheapest on offer exclusive of fright.

Tregg Cronin, at Halo Commodities, said it was "encouraging to see competitive free on board offers, but landed prices illustrate the island US wheat is on thanks to the freight disadvantage".

"The world wheat market is very competitive and the primary exporters have a lot of old crop wheat they need to get moved before the new crop supplies hit from the northern hemisphere," said Darrel Holaday at Country Futures.

Wheat export sales were reported at 264,000 tonnes, at the bottom end expectations.

Minneapolis surges against Chicago

May Chicago wheat unchanged the day down 0.1%, at $4.25 a bushel, as weak export sales withed.

But Minneapolis, spring wheat soared, with the May contract up 1.4% on the day at $5.47 a bushel, pushing the premium of front month spring wheat futures to May Chicago futures to a five-month highs.

Ms Rugel saw "Minneapolis leading the way up on recent firming in the cash markets and lack of producer selling".

Cocoa falls further

Cocoa future fell for the second straight session, as markets focused once again on massive global supplies.

Late on Wednesday a senior official in the ICCO warned that the cocoa market may be at the facing years of structural surpluses, depressing prices.

"In Cote D'Ivoire, the world's largest producer country, low prices have already resulted in mass non-fulfilment of export contracts," noted Commerzbank.

"This has led to a sharp rise in warehouse stocks at export terminals and in the country's interior."

"Consequently, cocoa farmers are having difficulties finding buyers for the beans they have harvested," Commerzbank said. "There are also reports of social unrest in the country."

Currency support for coffee

Coffee futures rallied, helped by a strengthening real earlier in the session.

May arabica coffee futures in New York finished up 0.4%, at 141.45 cents a pound.

May robusta settled up 0.1%, at $2,183 a tonne.

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