There was reason for investors to be cheerful, after the
International Monetary Fund raised its forecast for world growth.
The global economy will expand by 3.6% this year, and by 3.7%
in 2018, back to long-term average levels, the fund said, helping Wall Street shares nudge higher to fresh record
tops, and bring gains for commodities too – as a whole.
The CRB commodities
index stood up 1.2% in late deals, clawing back just ahead of its 200-day
"We've got an overall strong market," said Mike Zuzolo at
Global Commodity Analystics.
"'Risk-on' is how I would view this current price
'What is even more
Mr Zuzolo added that "what is even more substantial is that
both China and US growth forecasts were raise.
"This helps the commodity sector in particular with China's
increase," the country being a huge buyer of raw materials.
The dollar too,
typically seen as something of a safe haven, adding to the risk-on sentiment by
easing 0.5% against a basket of currencies.
Indeed, that only added to the cause to buy commodities,
will dollar-denominated raw materials becoming more affordable to importers as
the greenback falls.
However, agricultural commodities, particularly grains,
struggled to join in the really.
Soft commodities fared relatively well, with raw sugar for March gaining 1.6% to 14.22
cents a pound in late deals in New York, gaining strength from industry data
showing a large drop in Brazilian Centre South output of the sweetener.
A stronger real,
which gained 0.4% against the weakening dollar, helped too in boosting the
dollar value of Brazilian assets.
New York cocoa
for December bonded 1.7% to $2,042 a tonne, after its setback in the last
Jack Scoville at Price Futures noted that in the last
session, "the selling came as spectators sold the market in anticipation of the
European grind data that will be released this week", on Wednesday in fact.
"World production ideas remain high."
'Below the low-end of
However, on grain markets, Chicago corn for December stood down 0.3% at $3.48 ½ a bushel, undermined
by soft US export data for last week, at 524,168 tonnes, as drawn from cargo
That compares with 853,700 tonnes for the week before, and 1.16m
tonnes for the same week last year.
"Corn and wheat
export inspections came in below the low-end of forecasts," Mr Zuzolo noted,
with US wheat shipments last week at 350,632 tonnes, less than half the level
of a week before.
There also remain concerns over the potential for an upgrade
on Thursday by the US Department of Agriculture, in its monthly Wasde report,
to its forecast for the US corn yield this year.
This overshadowed the estimate by Conab of a further drop in
Brazilian farmers to sowings of first-crop, to the lowest in at least 13 years,
thanks to weak prices.
Wheat futures traded lower in Chicago too, by 0.1% to 44.35 ½
a bushel, little helped by results of a tender by Egypt's Gasc authority which
showed Russian wheat again the most competitive, and with 170,000 tonnes bought.
The cheapest (and a winning) offer of Russian wheat, at $197.97
a tonne excluding freight from El Wehda, was well below the cheapest offer of
Romanian origin, at $203.99 a tonne, with French offered by Casillo at $206.69
Meanwhile, although data on US winter wheat sowings are
expected to show plantings at 485 complete, 11 points behind the average
according to CHS Hedging, that will be down to rains which have rebuilt soil
moisture, and are easing, allowing fieldwork to accelerate.
Paris wheat for December eased 0.6% to settle at E163.00 a
tonne, weighed by a firmer euro too, which added 0.5% against the dollar.
'Unlikely to be
represented bulls' best hope of gains among Chicago majors, thanks in part to
decent US exports last week, at 1.48m tonnes, above the 897,017 tonnes the week
Furthermore, Conab forecast a drop of nearly 7m tonnes to
107.1m tonnes in Brazilian soybean output in 2017-18, seeing yields return to more
"The highly favourable climate conditions that contributed
to a record grain output last season are unlikely to be repeated," the bureau
And this assumes current dryness does not depress seedings,
which are running well behind at the moment.
"Brazilian soybean planting is said to be 6% complete versus
10% last year, with Mato Grosso only 5% planted versus. 17% for same period
last year," Benson Quinn Commodities said.
Still, the November contract sagged in midday deals, dropping
0.1% to $9.66 ¼ a bushel, weighed by its Chicago peers, and by a technical
setback, after an attempt failed to break above the 200-day moving average, at a
little under $9.76 a bushel.
expect the USDA on Thursday in the Wasde to raise its forecast for eth US
soybean crop, if by a modest 0.1 bushels per acre to 50.0 bushels per acre.