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Evening markets: Santa turns his back on crops

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The bears didn't exactly have a "fest" on Christmas Eve as the Chicago proverb said they should if bulls get a Thanksgiving dinner. (Which they did in some style, with wheat jumping 3% and corn 4% on Thanksgiving eve.)

But crops, nonetheless, lost their early promise, despite what had the makings of a decent day.

The dollar eased back to $1.4418 against the euro at one point, making US exports such as crops more affordable to buyers.

And oil maintained something of a rally too, up 0.8% at 18:00 GMT, so making a better case for crops such as biofuels.

Fact and rumour

As if that wasn't enough soybeans had a clutch of extra factors on their side.

One was a good day for its Chinese peers, which ended up 1.3% on the Dalian exchange at their highest close since September last year.

That helped Kuala Lumpur palm oil, the main rival to soyoil, higher too, ending 2.2% to the good at 2,554 ringgit a tonne.

Then there were weekly US export sales of 1.195m tonnes, ahead of trade expectations.

And there was a rumour that the US Senate might renew the $1-a-gallon tax credit on biodiesel before it expires at the end of this month.

"The House already approved an extension of this credit but the Senate wasn't expected to do so until sometime next month," Vic Lespinasse, the GrainAnalyst.com analyst, said, noting that biodiesel is made very largely from soyoil.

Mixed grains

But that wasn't enough to propel soybeans to a positive close. Chicago's January contract ended down 1.75 cents at $9.99 ½ a bushel.

Wheat did even worse, closing for Christmas down 4.5 cents at $5.24 ½ a bushel. But then, the grain didn't have strong export data to support it.

"Wheat sales were poor at 221,000 tonnes versus estimates at 200-300,000 tonnes," US Commodities said.

The news was better for corn, with export sales "huge" at 1.59m tonnes against estimates at 650,000-850,000 tonnes.

And indeed, it managed a higher close, up 3.75 cents at $4.08 ½ a bushel for March delivery, if a not wholly convincing rise given trading volumes of about 10% the year's peak levels in September.

As Mr Lespinasse said: "The market ended about the way it had been most of the holiday shortened session, mixed in dull, light volume trading.

He added: "More of the same is likely next week with full scale trading probably not returning until the following week, after the year end holidays are over."

Sleepy London

Still if he thought Chicago's volumes were bad, at 11,000 or so for March wheat, Mr Lespinasse should take a trip to London, where a total of 27 were traded across the while spectrum, according to Reuters data. That Christmas feeling appears to have arrived early.

The January contract managed to rise £0.25 to close at £105.90 a tonne without any dealing. The May lot stole what interest there was, closing up 0.25 at £111.25 a tonne after 19 lots changed hands.

Paris wheat's fall of E0.25 to E128.75 a tonne for January was modestly more convincing, on a volume of 209 lots.

Sugar, no coffee

As for the softs, it wasn't as if Christmas came early to coffee as failed to arrive at all, with March arabica coffee closing down 2.3% at 139.30 cents a pound, its lowest finish of the month.

With trading light at 4,750 contracts, it wasn't clear that there was anything fundamental behind the decline, traders said.

Their London robusta peers did a little better, ending down 0.7% at 1,327 a tonne.

Sugar felt more seasonal cheer, hitting a fresh 28-year high of 27.10 cents a pound and closing only 0.02 cents short.

By Agrimoney.com

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