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Evening markets: China, Greece boosts lift crops, bar coffee

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The prevailing wind remained support for risk assets on Monday, with hopes buoyant for a Greek rescue package, and after China made it easier for its banks to lend by cutting reserve requirements.

And that was credited for keeping grains, mostly, ahead on European exchanges, even when the closure of US markets for President's Day might have dictated a little caution.

"Today markets seem to have once again been supported by belief that the Greek debt is supposedly getting sorted," UK traders at a major commodities house said.

Europe vs Russia

As an extra help, the slim pickings of news on fundamentals was positive, with European Union

wheat

featuring in a 330,000-tonne order by Saudi Arabia, at $320.44 a tonne, while major competitor Russia struggled with its own shipments.

Russian grain exports for the first 12 days of the month came in a meagre 250,000 tonnes, not helped by the cold weather which disrupted logistics, data from the Institute for Agricultural Market Studies showed.

And prices of what wheat made it to port continued to rise, by some $10 to the equivalent of about $280 a tonne at the Black Sea, SovEcon said.

"The closer we get to the end of the season, the stronger the support [to prices] from low carryover stocks," the Moscow-based analysis group said.

Paris wheat for March eased 0.1% to E217.00 a tonne, feeling the pressure from a stronger euro, but the May lot, better-traded on the day, got in with the risk-on spirit, adding 0.8% to E211.50 a tonne.

London wheat for May added 0.8% to £168.40 a tonne.

'Potentially good harvest'

White

sugar

followed the trend too, adding 1.2% to $634.60 a tonne for May delivery, gaining support from the idea of huge Chinese imports floated by the International Sugar Organisation.

The ISO hiked by more than 600,000 tonnes, above 3.3m tonnes, its estimate for China's imports in 2011-12, citing the impact of poor weather in hampering domestic production.

And London

cocoa

for May added 0.6% to £1,514 a tonne, despite a cut by Rabobank to price forecasts, "on indications that the West African crop may beat initial expectations", Ivory Coast and Ghana being the top two producing countries.

"Early indications about the mid-crop are turning positive. Many pod counters continue to suggest a potentially good harvest, and now negative weather conditions are moderating."

Premium disappears

But London robusta

coffee

reversed, in the front March contract, many of the large gains reaped earlier in the month on ideas that available supplies for delivery against the lot would be squeezed.

And further ahead, high prices are only likely to encourage selling by Vietnamese producers, the top growers of the variety, who have enjoyed a record harvest, Rabobank said.

The March contract tumbled 5.2% to $1,987 a tonne, losing, after only a little more than a week, its premium over the May lot, which eased a more modest 0.7% to match it with a $1,987-a-tonne close.

By Agrimoney.com

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