Headway was hard to come by on Monday, as investors fretted
on what was to come from the plethora of data due this week.
And they did so without recourse to the distraction of
Monday's typical US Department of Agriculture statistics on US crop exports for
This data was, thanks to a government holiday (Columbus Day)
delayed until Tuesday, when it will spar for investor attention with Malaysian palm
oil data for September and the first official forecasts for Brazil's 2017-18
harvests of the likes of corn and soybeans.
(The UN Food and Agriculture agency is coming out with a big
ag briefing on Tuesday too.)
Soyoil was one of
the few ags to post decent gains, adding 0.8% in afternoon deals in Chicago to
stand at 33.21 cents a pound for December delivery, back above its 10-day
And that was largely down to some statistics late on Friday,
showing that hedge funds had slashed their net long position in the vegetable
oil by the largest amount on record.
The data "did indicate a smaller long position than
estimated for soyoil", said Futures international, with a smaller-than-expected
long position meaning less unfulfilled selling pressure on the market than had
It was also a help to soyoil that the US biofuels industry
is fighting back against Environmental Protection Agency plans to weaken
mandated use of biodiesel (which is made from vegetable oils).
'Dryness issues in
Soyoil's firmness in turned helped November soybean futures add 0.2% to $9.73 ¾ a
bushel, although short of the 200-day moving average, at a little under $9.76 a
bushel which the contract temporarily pierced earlier in the day.
Also helpful was the weather, with dryness in Brazil
retaining some alarm, even if some forecasts predict rain relief.
Benson Quinn Commodities said that "dry conditions that are
expected through much of Brazil for the next couple of weeks offered support"
to prices, particularly earlier in the session.
Futures International noted "continued talk of dryness
issues in Brazil, as there is little rain forecast for the next several days,
and a slow harvest in the US" prompted by too much wetness there.
Indeed, the Midwest forecast has turned wetter, said MDA,
adding that "continued active showers through mid-week will maintain slow
harvesting", although adding that "fieldwork should improve later in the week".
At Chicago broker RJ O'Brien, Richard Feltes said that
weather "leans positive" for prices, "with a moisture shortage in central
Brazil, excess moisture in western Argentina, and excess autumn moisture across
wide swathe of the western and northern US Midwest".
Still, there are negatives from the harvest slowdown too,
with Jerry Gidel at Price Futures saying that harvest, particularly in the
western Corn Belt, "needs to pick up quickly or this year's US export activity
could be delayed and possibly reduced".
Already, exports have suffered some logistical dislocation
from lower river water levels, which have hampered barge traffic from the Corn
Belt to port, and have been evident in eye-watering freight rates, although
these have come off a bit now.
Corn futures ease
Some of the factors supporting soybean futures apply to corn too.
But corn futures underperformed a touch, easing 0.1% to
$3.49 ¾ a bushel and, crucially, dropping below the psychologically important
Like soybeans, it has too the prospect of a small upgrade
later in the week to the US Department of Agriculture forecast for the US
harvest this year.
At least, so the trade believes, seeing a yield figure of 170.1
bushels per acre, up 0.2 bushels per acre from the current forecast.
For soybeans, traders are expecting a 0.1 bushels-per-acre
increase to 50.0 bushels per acre
Signally, corn lacks the support from a soyoil..
Furthermore, rival grain wheat hardly helped corn, in tanking 1.5% to $4.37 a bushel.
The rain in the Midwest, while a hang-up for row crops
sowings and indeed winter wheat seedings, is a net plus for these plantings, in
providing much-needed moisture.
In Australia, rains are helping the drought-pressed wheat
"Australia's wheat areas are forecast to see more beneficial
rains this week," CHS Hedging said.
Still, there were some positives around for the wheat
market, in terms of demand, with Ethiopia in the market for 400,000 tonnes.
There is some nascent, but growing, concern about dryness in
the European Union too.
'Very good production'
Among soft commodities, New York cotton futures for December stood own 0.5% at 68.49 cents a pond,
undermined by waning concerns of crop damage from Hurricane Nate.
In fact, "although some fields of cotton within Alabama,
Florida and Georgia did get wet, reports indicate that damage was minimal,"
said Louis Rose at Rose Commodity Group.
And New York cocoa
for December plunged 3.5% to $2,012 a tonne, in a decline fuelled by technical
factors, and with some note taken of a further reduction in the hedge fund net
short in the bean to below 26,000 lots for the first time in nearly six months –
creating fresh scope for selling.
At Price Futures, Jack Scoville reminded that "world
production ideas remain high.
"Harvest reports show good to very good production will be
seen this year in West Africa."
'It is dry again'
coffee futures for December gained 0.6% to 130.80 cents a pound, despite weakness
in the real, which dropped 0.9% against
the dollar, so making Brazilian
assets less expensive in dollar terms.
While Brazilian growing areas have received some rains to
boost ideas of a strong 2018 harvest, "it is dry again now and there are no
real forecasts for a wet period for the next week or so", Mr Scoville said.
"Most areas will need to see some consistent rainfall now to
keep the potential for a big crop alive."