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Evening markets: cocoa stars as grains mark time

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Chicago crops didn't stray too far, and trade remained muted, as investors marked time ahead of a US crop supply and demand report, leaving cocoa to grab the headlines by hitting a 14-month high.

A stable dollar and a lack of direction on stock markets added to the sense of hesitancy in Chicago, with oil markets also providing little in the way of inspiration.

Benchmark October New York light crude was 9 cents higher at $71.40 a barrel at 16:40 GMT.

There was some news potentially to excite investors, with the US announcing the sale of 176,000 tonnes of corn to South Korea.

'Positioning'

However, as Vic Lespinasse at GrainAnalyst.com said, the market's main focus was "evening up or positioning" ahead of Friday's US Department of Agriculture crop report.

"Prices remain mostly a little higher in light volume trading with short-covering ahead of tomorrow's report the main feature," he added.

December corn was 4.25 cents higher at $3.14 a bushel, with December wheat adding 3.75 cents to $4.60 a bushel, getting nearly 2% between itself and its two-year low.

Soybeans for November were unchanged at 9.28 � a bushel.

Across the Atlantic, London wheat also held its ground at E92.25 a tonne for November delivery.

However, Paris milling wheat for November retreated, closing down E0.50 at E121.00 a tonne, E1.00 a tonne above the contract low hit earlier this week.

'Difficult harvesting'

Softs were where the action was. White sugar closed 3.8% higher at $539.00 a tonne in London, with the latest rain delays to Brazil's crop, plus India's continuing shortage, reviving investor demand.

"Rain has continued in Sao Paulo and Parana states and harvesting has become more difficult due to waterlogged fields," Sucden, the London broker, said.

Jayantilal Patel, president of India's National Federation of Cooperative Sugar Factories, estimated the country's sugar stocks would drop to 2.7m tonnes by the start of October, the lowest in 15 years.

In New York, raw sugar for October stood 3.1% higher at 21.63 a pound.

Cocoa lifted

New York cocoa for December recovered from early lows to reach $3,085 a tonne at one point - the highest for a nearest-but-one contract since July last year - amid concerns for the quality of the main crop in Ivory Coast, the world's biggest producing nation.

New York's September contract stood up $29 at a 14-month high of $3,066 a tonne, but in thin trade.

Long-term fundamentals for cocoa also look favourable, with the cocoa crop set to fall short of demand for a fourth successive year, according to Rabobank.

London cocoa for September closed up �19 at �1,918 a tonne, with the December lot up �17 at �1,944 a tonne.

By Agrimoney.com

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