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|Evening markets: wheat futures fall as supply concerns ease
By Agrimoney.com - Published 26/05/2014
Monday was marked by, besides low trading volumes, with the UK and US on holiday, an idea of reduced risk, which was more positive for prices of shares than grains.
The reduced risk theme was helped by the clear result to the Ukraine presidential elections, won by confectionery magnate Petro Poroshenko, who said he wished to talk to Moscow to try to halt hostilities and return stability to his country.
That said, whether such an outcome will come easily remains in doubt, with Ukraine troops undertaking air attacks in an effort to regain control of Donetsk airport from pro-Russian rebels.
Still, European stocks rose, echoing gains in Asia, and helped by Friday's record high in Wall Street for the S&P 500 index.
Paris stocks added 0.8% and Frankfurt shares 1.3%.
'Why should buyers hurry?'
But any sign of accord in Ukraine is negative for grain prices, given that the country is a major exporter of both corn and wheat.
And Paris wheat faced further pressure too, with the weekend bringing much-needed rain to much of the southern Plains – in Texas, the town of Ralls received 5.4 inches of rain in three days – so at least raising the prospect of stabilisation for drought-pressed winter wheat crops.
As an extra worry, some investors have been worried about a dearth of demand too.
"Very little shipping trade has been done for the new season so far," one major European commodities house said, flagging the inventory rebuild that many buyers have done in 2013-14.
"It means that they do not need to make any immediate new crop purchases and, with prices falling, why should they hurry?
"Furthermore, most countries in North Africa and the Middle East are expecting reasonable harvests at home this year."
There have actually been some signs of demand around, to erode such ideas a bit, with the Philippines on Monday seeking through tender 95,850 tonnes of feed wheat for July or August shipment, depending on origin, besides 84,375 tonnes of soymeal.
Algeria tendered to purchase 50,000 tonnes of optional origin milling wheat, for August shipment.
Some Israeli buyers have issued a tender too for 40,000 tonnes of feed wheat, from any origin, besides up to 108,000 tonne of corn, from the US, South America, Europe or the Black Sea.
This after wheat purchases by the likes of Iraq and Tunisia last week.
Still, there was little upward pressure on Paris wheat futures, which ended down 1.2% at E192.75 a tonne for November delivery, the contract's slowest close in getting on for three months.
The contract surrendered its 100-day and 200-day moving averages too.
'Trade remains very thin'
Also in Paris, rapeseed ended 0.7% lower at E356.00 a tonne for August delivery,
"Right across Europe trade remains very thin, although there have been signs of some farmer selling on the Continent," the European trading house said.
The news from elsewhere in the oilseeds complex was not so helpful, with palm oil hitting a seven month low of 2,483 ringgit a tonne in Kuala Lumpur earlier, if recovering most lost ground to end down 0.3% at 2,517 ringgit a tonne.
In Winnipeg, canola for July closed down 1.4% at Can$480.90 a tonne, amid better sowing conditions for Canadian crops.
"Weather in Canada is improving which should enable canola plantings to progress," UK co-operative Openfield said.
"With talks of an early harvest in the UK and the possible threat of early French rapeseed being available mid-June, old-crop [prices are] likely to come down to meet new-crop in the coming weeks."
Sure, there are "some signs of hope" for rapeseed bulls, the co-operative added, noting strength in soybeans in Chicago, and dry weather in eastern Australia, boding ill for canola crops.
"The bearish fundamentals, however, far outweigh the bullish ones which points to lower values longer-term, unless fresh bullish news materialises."
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