Linked In
News In
Linked In

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

Evening markets: cocoa turns the table on grains

Twitter Linkedin eCard

Cocoa turned the tables on the big grains, managing � at last � to find support levels while Chicago's main crops slipped.

It was a forgettable day in many asset classes for investors with long positions. European and US shares eased, while oil had a shocker after downgrades this week from the International Energy Agency, the Energy Information Administration, and OPEC about global oil demand.

Brent crude for July was 4.0% lower at $56.26 a barrel at 17:00 GMT, with New York crude down 2.9% at $56.95 a barrel.

Weakness in Chicago grains was to be expected � and, indeed, to be found.

"The outside markets have become an increasingly bearish influence on the grains," Vic Lespinasse at said.

Corn, as a major source of ethanol, an alternative to oil-based fuels, felt the pinch, with the benchmark July contract easing 1.5% to $4.22 a bushel and longer-dated contract down similar amounts. March 2010, for instance, lost 1.5% to $4.53 � a bushel .

Glass half empty

Wheat suffered similar across-the-board losses, as the bearish atmosphere focused traders' minds on the bad news � forecasts of bumper stocks ahead �rather than the potential bullish news waiting in the wings.

For example, the potential for a further slowdown in US spring crop plants and dry weather in Western Australia and Argentina.

July 2009 wheat lost 1.6% to $5.83 � a bushel while, for instance, July 2010 was 1.5% lower at $6.60 � a bushel.

European wheats got some protection from weaker currencies. London July wheat, for instance, slipped a relatively mild �1.00 to �120.00 a tonne, with Paris August wheat down E1.50 at E148.00.

Reduced hopes for crops in the European Union's backyard rival, Ukraine, have also protected European wheat somewhat. UkrAgrConsult, the analysis group, cut its estimate of Ukraine's overall grain production from 40.0m tonnes to 38.7m tonnes.

'Strong support'

So soybeans proved the best of a bad Chicago bunch, slipping 1.2% to $11.34 a bushel for July, with similar losses in further ahead contracts as traders tempered betting against a crop which still appears to be in strong demand in China.

And cocoa trumped the lot of them by closing up 1.1% at �1,607 a tonne in London, for the July contract, and standing 0.9% up at $2,330 a tonne in New York.

Cocoa has suffered four days of losses on reports of weak demand and decent supply, which have sent prices through a series of levels which traders had hoped might offer support.

The level of $2,300, however, appears to have held.

"It does look as if prices are struggling to fall through the $2,300 level," Nicholas Snowdon, an analyst at Barclays Capital told Reuters, the news agency.

"There might be dips beneath, but there definitely seems to be strong support around there."


Twitter Linkedin eCard
Related Stories

Evening markets: Soybean futures torn between Argentina, China fears

... with one concern upbeat for prices, and the other decidedly bearish. Cocoa, wheat end firm. But sugar comes close to a two-year low

Lean hog futures tumble - but it's not all China's fault

Beijing’s threat to impose a 25% tariff on imports of US pork is hardly bullish news for hogs. But it is not the only factor explaining tumbling prices

Weekly grains and oilseed market view from Europe, March 23

Wet weather slows spring sowings... are EU grain supplies as big as data suggest?... support to wheat prices from rises in Russian values...

Morning markets: Soybean prices hold, even as China-US trade tensions grow

Still, what of rising soybean prices in China itself - where sugar import data show how import levies can affect trade? US wheat futures extend their recovery
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069