PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 17:47 GMT, Thursday, 13th Apr 2017, by William Clarke
PM markets: soybean futures rise ahead of the long weekend

Soybean futures continued to bounce back from oversold conditions ahead of the long holiday weekend, helped by flooding Argentina, while wheat futures edged lower, with concerns over the slow pace of exports.

There are ideas that all the bearish news has been factored into the soybean market, and now it is time to start worrying about the potential for weather disruption.

"Everything is bearish," said Steve Georgy, at Allandale. "But that's when we need to be a bit cautious about what's happening next."

Flooding fears in Argentina

"Some flooding taking place in Argentina, the market is aware of this and is actively watching how much worse it gets," said Ridge Erdmann, at CHS Hedging.

But there whether the situation is actually a threat to yields remains the subject of some debate.

 "The firm tone in the beans is tied to the oversold conditions and the funds having liquidated their long position," said Brian Henry, at Benson Quinn Commodities.

"There is again mention of the wet conditions that have plagued areas of Argentina," Mr Henry.

But he noted that the flooding is now unlikely to get worse. "The current forecast for the bulk of Argentina looks favourable for better harvest progress."

Conditions to get drier

"Rain lingered across northern and eastern Buenos Aires and far southern Santa Fe on Monday, but dry weather has prevailed across Argentina since," said Kyle Tapley, at MDA Weather Services.

"The drier weather is allowing wetness to slowly ease and corn and soybean harvesting to resume," Mr Tapley said.

"Rainfall will return to the region during the first half of next week, but the most significant rainfall should favour northern areas."

"This should limit the potential for any additional significant harvest delays in southern Argentina," said Mr Tapley.

And weather is expected dry from the middle of next week, out till the end of the fifteen day forecast.

Soybean sales holding strong

The US Department of Agriculture reported soybean export sales came in at 402,000 tonnes, on the bottom end of analyst expectations.

But given how late it is in the season, export sales are still quite strong.

May soybean futures were up 0.9% in mid-day deals, at $9.56 a bushel

Corn export sales were some 738,000 tonnes, just below the bottom end of the expected range.

May corn futures were up 0.6%, at $3.71 a bushel.

Slow wheat shipments

Wheat export sales were some 422,000 tones, at the upper end of analyst expectations.

But attention is more focused on the slow pace of shipments.

"We are now more closely monitoring shipments and how they are matching to pace needed to reach USDA exports," said Benson Quinn.  

"There are only eight weeks left in the wheat marketing year and shipments once again missed pace to reach USDA estimates and makes one wonder why USDA raised hard red winter wheat exports in Tuesday's wasde report."

May Chicago wheat futures were down 0.6% in mid-day deals, down $4.30 a bushel.

Cocoa makes new lows

Cocoa futures slumped to new four-week lows, extending losses of the previous session on signs that demand remains sluggish despite low prices.

"During the first quarter, cocoa grinding in Europe rose by only 1.1% year on year," noted Commerzbank.  "A marked drop of 7.7% in grinding in Germany had a major impact on demand."

"This decline was due to one of the major grinders becoming insolvent and having to close down most of its production facilities," Commerzbank said.

Confectionary manufacturer Barry Callebaut separately reported 2.1% decline in the global market for chocolate confectionary in the six months to February.

"The slump in prices of almost 40% since last summer has not yet therefore led to demand for cocoa picking up again," Commerzbank said.

July New York cocoa futures were down 2.5%, at $1,917 a tonne, in early afternoon deals, at a four-year low.

And May futures, which are less traded, actually broke recent lows to an eight-year low, down 3.3%, at $1,878.

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