Traders buckled in for a big week, with index fund
rebalancing, and a major data release coming later.
"Grain traders this week will have several major events to
deal with", said Paul Georgy, at Allendale.
Firstly is the rebalancing of index funds, which started on
the Monday session.
Funds are expected to be big net buyers of wheat and corn, with a touch of soybean
buying as well.
Although this movement should be mostly priced in, it will
support grain volumes.
USDA data awaited
And the other big news will be a slew of data to be released
on Thursday, by the US Department of Agriculture.
Thursday will see the release of final US production figures
for 2016-17, as well as quarterly stocks figures, winter wheat seedings, and
the monthly supply and demand estimates.
Analysts are expecting record large corn and soybean stocks.
Good export sales
Export numbers will be in the spotlight this week, after
Friday's surprise news of a big cancellation in soybean export sales.
But the news of Monday was mostly supportive.
The USDA announced sales of 112,500 tonnes of corn, and
120,000 tonne of hard red winter wheat, although there was still no sign of soybean
export sales, which are badly needed.
"Brazil is very close to starting this year's soybean
harvest which could change China's buying from the US trend," said Mr Georgy.
Weekly export inspection figures exceeded analyst
expectations for corn and soybeans, at 877,000 tonnes and 1.46m tonnes
But wheat export inspections were an underwhelming 261,000
tonnes, missing the range of analyst expectations.
And markets are still watching weather developments in South
America closely, with some of the concern switching from soybeans to wheat.
"Weekend weather remains good for the Brazilian crops,
however, too much rain has been seen for Argentina's growing area," said Mr
"Forecast is for some drying to occur in the 6 to 10-day
period in Argentina but that may not last long," he said.
But Mr Georgy noted that "analysts are expecting Brazil's
crop to out produce any losses in Argentina's production".
Winterkill fears in
Kim Rugle, at Benson Quinn Commodities noted the possibility
that the rains could hit Argentine wheat quality.
"Ongoing rains in Argentina continue to help support the
grains sector," said CRM AgriCommodities.
And the weekend weather in the US was enough to raise some
concerns as well, with the question of whether snow-cover was sufficient to
prevent winterkill after a cold weekend.
"Wheat is getting support from the cold US weather causing
concerns of winterkill," said Mr Georgy.
March Chicago wheat finished up 0.9%, at $4.27 a bushel.
March soybean futures finished up 1.0%, at $10.05 ¼ a
March corn futures finished up 0.4%, at $3.49 ½ a bushel.
All quiet in Western
underwent a sharp downward correction, as the risk of unrest in top-grower Cote
There were concerns on Friday after a widespread mutiny by
But the country was reportedly calm, and the soldiers
dispersed on returned to barracks, including in the country's second-largest Bouake,
the epicentre of the disturbance.
President Alassane Ouattara appeared on Ivorian television
on Saturday, saying that a deal had been reached over pay and conditions, with
an amnesty offered for mutineers.
March New York cocoa settled down 3.4%, at $2,184 a tonne, after
hitting lows of $2,141.
Sugar prices fell
further back from last week's seven-week high, under pressure from ample
"There seems to be plenty of sugar at terminals in
Brazil waiting to be loaded and the shipping lineup has been reduced," said Nick
Penney, at Sucden Financial.
Physical prices have not followed the rally in futures and
at some stage something has got to give in order for convergence to take
place," Sucden Financial senior trader Nick Penney said.
And there is likely to be heavy index fund selling this
"In sugar it is estimated the Index Funds will need to sell around
15,000 lots to rebalance portfolios," said Mr Penney.
"This will have been largely written in and should not
affect values too much, but bears watching," he said.
March raw sugar futures settled down 1.6% at 20.42 cents a pound.