In the end, cotton
futures came nowhere near matching their limit-up performance of the last
It was not as if the US looks like being spared another
hurricane, with Irma expected to make landfall in the US in pretty much exactly
four days' time, in what (following on from Harvey) some commentators have said
would be the first back-to-back tempests to the hit the US since 1064.
But there remains
doubt about exactly where Irma, billed "one of the strongest Atlantic
hurricanes in history", might make landfall and so how much of a threat it
poses and, from an agricultural perspective, to what crops.
"Most forecast models then show the storm making a turn to
the north and passing either right over the centre, or just off the east coast,
of Florida," said MDA, saying that this course "would result in some damage to
Florida crops, especially citrus and sugar
However, a more easterly steer "would lower damage potential
for crops within Florida but would in turn increase threats to cotton, corn,
and soybean crops in the Carolinas", the weather service added.
Louis Rose at Rose Commodity Group said: "At this time, cotton
fields within south east Georgia and South Carolina appear to be at the
greatest risk of significant damage from the storm."
Still, where was not perception of enough crop damage ahead
to keep New York futures moving higher, and the December lot closed down 0.5%
at 74.50 cents a pound, after touching a five-month high of 75.65 cents a pound
Juice market turns
fared significantly worse, tumbling 2.9% to 140.80 cents a pound for November delivery,
and giving back many of the gains made in the last session.
After all, as Jack Scoville at Price Futures said, "the
demand side remains weak and there are plenty of supplies in the US".
In fact, raw sugar futures appeared to fare better
out of Irma worries, with the New York October contract closing up 1.9% higher
at 14.29 cents a pound, helped by fears about what 185mph winds might be doing
to Caribbean cane plantations, let alone Florida ones.
"Irma is currently a very powerful hurricane and will cause
a lot of damage wherever it roams," said Mr Scoville, with reference to sugar.
Indian import talk
There were other reasons for buying sugar too, including a
firmer real, which boosts the value of assets in which Brazil is a major
player, and the continued talk of Indian imports.
Sucden Financial flagged reports that India "will allow
300,000 tonnes in imports of raw sugar at a tariff of 25% for nearby arrival.
"This in order to reduce pressure on supply ahead of the
Diwali festival," with the raws to be shipped to southern Indian ports for
"Whilst the amount may be far short of what the market was
hoping for, if confirmed, would justify the long-held belief that India is running
perilously low of stocks," a dynamic especially key as the country's cane
harvest looks like being a late one.
"The Indian harvest could be delayed due to wet conditions
that would delay sugar cane harvesting," Mr Scoville said.
'Risk for soybean
In Chicago, price movement was broadly upward too, although
with US Midwest dryness more of a worry than Florida floods, continuing to
provoke concerns over whether soy crops will be able to reach their potential.
"Dry condition in the Midwest are a risk for soybean yields,"
said CHS Hedging, if adding that "estimates remain stable for now".
Benson Quinn Commodities said that "eastern Corn Belt
dryness and northern belt coolness is causing some concern about the finishing
timeline", for corn as well as
In fact, Richard Feltes at RJ O'Brien said that the weather outlook
"leans positive" for prices, flagging "very little Midwest precipitation"
expected over the next two weeks, but noting other threats too.
"Eastern Argentina is trending unfavourably wet," while eastern
Australia "is still dry", although the latter factors are more issues for wheat production.
Darrell Holaday at Country Futures said that there is "still
a lot of debate about US yields" this year of corn and soybeans.
And the willingness to reinject a bit of risk premium helped
Chicago soybean futures for November
up 0.3% at $9.71 a bushel.
Corn fared better, adding 0.6% to $3.61 a bushel for
December, amid somewhat downbeat talk from the early US harvest.
RJ O'Brien's Richard Feltes flagged "yield reports which in
central Illinois are falling short of expectations so far.
"On the flip side, we are hearing of blow-out soy yields
across the Delta."
Spring wheat springs
fared better still, adding 0.7% to $4.45 ¾ a bushel in Chicago for December
delivery, with the contract closing above its 20-day moving average for the
first time since mid-July.
Australian dryness worries helped wheat prices, as did a
strengthening rouble, which gained 0.3%
against the dollar to make Russian
exports, such as those of grains, that much less competitive.
But also of help was a recovery in Minneapolis-traded spring wheat, which closed 2.5% higher
at $6.44 ½ a bushel for December delivery, achieving its first positive close
in seven sessions.
The gains defied some somewhat bearish Canadian stocks data,
with the country's all-wheat inventories seen up 33% at 6.87m tonnes as of the
close of 2016-17 (at the end of July), ahead of market expectations of a
On the plus side for spring wheat is the wind-down of the US
harvest, and with it reduced pressure from a jump in supplies, as well as ideas
that even if yields have held up against summer drought better than many
investors feared, acreage losses could be substantial.