Grain futures continued to bounce back from an ostensibly
bearish data release on the previous session.
The US Department of Agriculture's monthly world agriculture
supply and demand report showed world grain markets even baggier than expected.
"USDA once again confirmed more than ample world supplies of
corn, wheat and soybeans raising carryouts to fresh record levels," said Kim
Rugel, at Benson Quinn Commodities.
"Yet markets this morning are steady to higher on 'sell the rumour,
buy the fact,' oversold technicals and shifting in focus to weather," Ms Rugel
Is there any more
bearish news to come?
One reason for the bounce back may be simply an idea that
there is now no more bearish news to come.
Massive stocks for all grains are a long-accepted fact, and
even after the upgrade last week, USDA estimates for the Brazilian soybean
harvest undershoot expectations for the trade.
"The trade knows we have large and getting larger stocks of
corn and soybeans after seeing USDA reports," said Paul Georgy, at Allendale.
"Traders now are asking, what additional bearish news is left
to throw at us?"
And markets continue to weigh up the recent heavy rain in
Argentina, and what damage could have been done.
"Concerns are growing over wet conditions in Argentina, some
analysts expecting a reduction in the Argentine crop," said Steve Wagner at CHS
"In Argentina, heavy rains have delayed harvest activity and
even with dry forecast for week ahead harvest activity will be slow to resume,"
said Ms Rugel.
The Argentine soybean belt is currently drying out, but
there are concerns that rains could return, before the harvest is finished.
Farmer hoarding in
response to low prices
"Lack of farmer selling in both US and South America is
offering support to the oversold soybean market," Ms Rugel noted.
"Many farmers have indicated that they will continue to be
relatively slow sellers of their remaining crop in the hope of improved prices
going forward," reported analyst Dr Michael Cordonnier.
"Nationwide, Brazilian farmers have sold 45% of their anticipated
soybean production compared to 60% sold last year at this time," Dr Cordonnier
May soybean futures finished up 0.9%, at $9.47 ¾ a bushel.
May corn futures finished up 0.7%, at $3.69 a bushel, back
above the 100-day moving average.
Tight EU market
also rose, as data continues to show tight market in Europe, after the small
crop of last summer.
France AgriMer, the French government crop agency, cut their
estimate for 2016-17 ending stocks, down 400,000 from last month.
And EU customs data showed soft wheat exports out of bloc
continuing to lag behind last year's pace at 18.8m tonnes, compared to 23.0m
tonnes at the same time a year ago.
May Paris wheat futures finished up 1.4%, at E164.50 a
In Chicago, May wheat futures finished unchanged on the day,
at $4.33 ¼ a bushel.
Sugar prices ease
Raw sugar edged
lower, as the Brazilian harvest ramps up.
Sugar production in Brazil's centre-south sugar output rose
to 270,000 tonnes in the second half of March, up from 73,000 tonnes in the
previous fortnight, as mills open up for the season.
May raw sugar finished down 0.1%, at 16.7 cents a pound.
And cocoa futures
tumbled, on ideas of disappointing demand.
True, European grinding rose by 1.1% for the first three
months of the year, in-line with expectations.
But chocolate maker Barry Callebaut estimated that the
global chocolate market shrunk by 2.1% in the six months to February.
July New York cocoa finished down 1.1%, at $1,967 a tonne.