Grain futures saw some early strength on the news that speculators
were massive net sellers in grains over the week to last Tuesday.
This was seen as supportive for prices, as it means that
there will now be more gas in the tank for future rallies.
But Tregg Cronin, at Halo Commodities, suggested that the
complex has "probably watched some buying come back in since".
And wheat markets
came under pressure, as weather prospects in the US Plains improves, with hard
red winter wheat futures in Kansas City leading the market down.
Moisture needed in
Dryness in the US Plains has been a major factor
underpinning grain markets, as the winter wheat crop has only limited time to receive
moisture, before spring development starts to be affected.
"Very little precipitation has fallen across the west
central Plains over the past two months and the continued above normal temperatures
are accelerating drying of soils," said Kyle Tapley at MDA Weather Commodities.
But Mr Tapley said "cooler weather should spread across the
region tomorrow and showers are expected to develop on Thursday and Friday,
particularly in northeastern Colorado and Nebraska".
"Above normal precipitation is expected across most of the
central U.S. in the 6-10 day period," Mr Tapley said.
"A timely weather system is expected to arrive this week and
provide relief to the HRW crop across the Great Plains," said CHS, although it
noted that "coverage may be spotty".
And weather worries are also easing for the next Australian
"Forecasts of rain in Australia are expected to relieve soil
moisture concerns ahead of plantings, whilst Aussie wheat exports are currently
at a record pace following a 35m tonnes harvest," CRM said.
Strong wheat exports,
but prices still tumble
The hopes for much needed moisture weighed on wheat prices,
despite some good export inspection data.
Weekly US export inspections for wheat came in at 624,000
tonnes, ahead of the estimated range of 350,000-550,000 tonnes.
Prices for hard red winter wheat, the variety primarily
grown the US Plains, saw the sharpest fall.
May Kansas City wheat futures finished down 1.9%. $4.45 a
May Chicago wheat futures finished down 1.5%, at $4.29 ¾ a
bushel, breaking back below the 100-day moving average.
pressure still in place
Wheat led other grains lower, with prospects still good in
Argentina, while the Brazilian harvest continues apace.
"Weather in South America remains favourable for growing
crops in Argentina," said Paul Georgy, at Allendale.
Mr Georgy noted expectations of "some rain to delay harvest,"
in areas of Brazil, "but nothing which would damage crops".
Agro Consult forecast the Brazilian soybean crop at 111m
tonnes, 3m tonne higher than the latest USDA forecast.
Big soybean export
Weekly US corn
export inspections came in in-line with expectations, at 1.33m tonnes, in line
May corn futures finished down 1.2%, at $3.63 ¼ a bushel,
back below the 100-day moving average.
fared a little better, as export inspections came in at 737,000 tonnes, ahead of
May soybean futures finished down 0.2%, at $9.98 ¼ a bushel.
Cocoa futures soar
soared, punching back through the 50-day moving average, to put in the biggest
single-day gain for the front-month contract in year.
"Both New York and London are showing signs that a bottom
has been made and that prices can move higher over time," noted Jack Scoville,
at Price Future Group, early in the day.
Prices got some impetus from reports that hot and dry
weather in parts of Cote D'Ivoire, which could threaten the mid-crop.
May New York cocoa settled up 5.1%, at $2,116 a tonne, near
a six-and-a-half-week high.
The Chinese government announced that it will only revise its
target price for cotton in the
top-growing region of Xinjiang once every year.
The government had previously been lowering the price on a
yearly basis, effectively cutting farmer incomes and discouraging plantings.
China has announced that it will set its target price for
cotton in (the country's largest growing region) every three years.
"The latest changes suggest China's government has perhaps
reached a level of output they are satisfied with," suggested Tobin Gorey, at
Commonwealth Bank of Australia.
May cotton futures settled down 1.3%, at 77.33 cents a pound,
after putting in the strongest close since June 2014 on Friday.
Sugar tumbles back
rollercoaster continues, as May raw futures once again broke back below the
18-cent level, triggering another wave of selling.
But unlike on Friday, when stop-losses were triggered on the
same signal, no buying emerged to push prices back up again.
May raw sugar futures settled down 2.6%, at 17.70 cents a
"The funds 'smell' money on the short term on the short,"
suggested Tom Kujawa at Sucden Financial.