Anyone with soybeans
from the last harvest left in the barn saw them grown in value again on
Chicago September soybean futures rose for a sixth
successive session, this time by 1.5% to $11.36 ¼ a bushel, the contract's best
finish in nearly a month, and closing over its 40-day moving average for the
first time since June.
The cause is a clamour for soymeal, which for September jumped 2.8% to $413.80 a short ton, the
contract's best finish since June.
"Profitable pork and poultry sectors are having difficulty
finding old crop soymeal offers as more [soybean crushing] plants shut down
until harvest," Richard Feltes at Chicago broker RJ O'Brien.
Soybean prices were rising "effort to draw remaining tightly
held old crop beans into depleted pipeline".
On the US cash market, Decatur, Illinois soybean basis has
reached $2.50 a bushel over November futures, "fully $0.50 a bushel over last
year's highs while CIF [export] soybean basis is $0.90 a bushel over early August
highs last year", Mr Feltes said.
At Country Futures Darrell, Holaday said that soybean processors
are "still aggressively bidding for spot soybean delivery for fulfil needs
until they shut down sometime in the next 30 days.
"Bids $2.00 a bushel over the November contract are very
common, which equates to $12.40-a-bushel soybeans."
There was enough strength, just, to carry over into the new
crop space for which fundamentals are, of course, completely different, with
the US seen on course for a record harvest, by a distance.
November soybeans closed all of 0.25 cents a bushel higher
at $10.38 ¼ a bushel, helped by a 0.7% rise to $346.50 a short ton in December
Strong US export sales helped too, at 1.42m tonnes last week
for 2014-15, well ahead of market expectations, and, signally, including nearly
950,000 tonnes bought by China.
An apparent dearth of orders by buyers from China, the top
importer, had spooked markets.
Weak export data
Still, soybeans' Chicago grain peers were going to have to
rely on other sources of strength if there were to close higher, with US export
sales soft for corn, at 719,300
tonnes for new crop, and well below forecasts for wheat, at 209,200 tonnes.
The wheat figure was "down 38% from the previous week and
62% from the prior four-week average", the US Department of Agriculture said,
besides being less than half the volume some investors had expected.
It was particularly low for hard red winter wheat, the type
traded in Kansas City, which indeed saw a revival in its performance against
its Chicago soft red winter wheat and Minneapolis spring wheat go into reverse.
Indeed, it was a negative 25,000 tonnes, reflecting
cancellations by Brazil, which has reinstated a 10% tariff on orders from
outside the Mercosur trading block.
Still, wheat gained support in part from Statistics Canada data estimating the Canadian crop at 27.7m tonnes – 800,000 tonnes below market
Not all investors were quite so convinced of the bullishness
of that data, with Statistics Canada having a reputation for conservative
estimates at this time of year, and such a harvest not a bad one.
"Not another banner year, but good wheat production
nonetheless," Benson Quinn Commodities said.
Still, the concerns over weather remain, both in Canada and
the northern US, raising concerns over the quality of the crop this late in its
development, with wet weather for example spreading fungal disease, with the
inherent risk of toxic fungal residues.
Benson Quinn said it "would be more concerned with the
potential effects of cool/damp conditions that go hand in hand with a
relatively late harvest".
'No grain export
The former Soviet Union continues to throw out bearish data,
with Rusagrotrans estimating Russia's grain exports for August at 3.9m-4.0m
tonnes, a record for any month.
And Ukraine formally quashed talk of limits on its milling
wheat exports, speculation which sent prices soaring on Tuesday.
"We, according to preliminary estimates, have the opportunity
to export 30m tonnes [of grains] or even more," said Yaroslav Cherevichny,
the head of market monitoring at the country's agriculture ministry.
"With these export opportunities, common sense says
that no grain export limits are necessary.""
Close to the former Soviet Union, Paris milling wheat for
November struggled, closing up a modest 0.2% at E171.50 a tonne, dented too by
a slight strengthening in the euro, making eurozone exports less competitive.
London feed wheat for November edged 0.1% higher to £120.85
a tonne, facing improved UK harvest prospects.
However, Chicago wheat for September added 1.3% to $5.46 ¼ a
bushel, ending just below its 40-day moving average.
Spring wheat, the type threatened by northern US and
Canadian rains, added 0.9% to $6.15 ¾ a bushel in Minneapolis for September
Barley, sorghum trade
Wheat was a help for corn
too, which added 0.4% to $3.69 a bushel in Chicago, despite mediocre US export
sales data and continuing strong reports from the ProFarmer tour of the
"The theme of above-average yield reports has continued,"
CHS Hedging said.
The increase also defied talk that US barley and sorghum are
the latest feed grains to fall foul of Chinese authorities, with increased
checks for pesticide residues and heavy metals.
"The US is the largest exporter of sorghum and China is the
primary market. Could this have some potential side effects on the market? Will
tons be returned?" CHS asked.
A refusal of US barley and sorghum cargos would only boost
further the feed supplies in the US itself.
Cotton rally slows
Among soft commodities, New York cotton's rally calmed, with the December contract limiting its
rebound this time to 0.2%, taking it to 65.92 cents a pound, the best finish in
nearly a month nonetheless.
One negative is a claim by the Cotton Association of India
that India will in 2014-15 overtake China as the world's top producer, with
output of 6.74m tonnes, ideas that the US Department of Agriculture, which pegs
the harvest at 6.0m tonnes, and International Cotton Advisory Committee, at
6.3m tonnes, have backed away from.
The Cotton Association of India's optimism reflects an
improvement in the monsoon, after its poor start, allowing speedy progress in
"Planting is making rapid progress – by mid-August 5.4% more
acreage had been planted with cotton in India than at the same time last year,"
'Brazil offers to
But raw sugar
managed to extend its rebound from its six-month low of 15.38 cents a pound
touched on Wednesday, jumping 1.9% to settle at 15.99 cents a pound for the October
contract – which closed above its 10-day moving average for the first time in
nearly a month.
Jack Scoville at Price Futures noted "some talk around the
market of the chance for shortages to develop soon as Brazil starts to wind
down the cane harvest and Thailand gets its sugar sold.
"Brazil offers are expected to drop once the harvest there
And, in coffee, robusta beans this time outperformed,
adding 1.0% to $1,988 a tonne in London for November delivery.
Coffee output in Indonesia, the world's fourth biggest
coffee producer, mainly of robusta beans, will fall 14% to 600,000 tonnes this
year, the Indonesian Coffee Exporters and Industry Association said, cutting
its forecast by 100,000 tonnes.
"Unfavourable weather, and outbreaks of pests and
diseases are causing the decline," said Irfan Anwar, the association's
Indonesia exports will fall 30,000 tonnes this year to 450,000
tonnes, he said.