RSS
Twitter
Linked In
News In
Markets
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Evening markets: corn, wheat set new 2009 lows

Twitter Linkedin

Favourable US weather, Chinese soybean sales, Egyptians preferring Russian wheat – it was little surprise that American and European crop prices lost ground on Tuesday given the headwinds they faced.

And that was even before comments from Ben Bernanke, the head of the Federal Reserve, dented sentiment in financial markets by saying that unemployment was likely to remain high into 2011, hindering a revival in consumer confidence.

The comments cost shares and oil early gains, and revived the dollar which strengthened against the euro to a little under $1.42, bouncing from a six-week low.

A strong greenback was another reason for investors in Chicago farm commodities to sell, making dollar-denominated assets more costly to foreign buyers.

Cairo factor

Indeed, Egypt, a big grain importer, may have needed little persuasion to opt for Russian over US wheat in tenders for 60,000 tonnes.

Vic Lespinasse, analyst at GrainAnalyst.com, said: "Egypt paid $178 a tonne versus the cheapest US offer of $189 a tonne. Freight cost $20 a tonne from Russia versus at least $41 a tonne from the US."

Even considering that Russian wheat is often cheaper for a reason – lower quality – that is a tempting discount.

Chicago wheat for September slumped 8.25 cents, or 1.6%, to $5.33 ½ a bushel at 17:30 GMT.

European contracts were hurt too. In France – where Egypt had been sourcing much of its wheat – Paris's August contract dropped E1.25 a tonne to E135.75 a tonne.

London wheat slid £1.50 to £109.75 a tonne, a 2009 low for the contract, and 18% below its most recent peak at the start of June.

Corn slips

Still, Chicago corn investors will have little sympathy, with the September contract shedding 11.5 cents, or 3.6%, to $3.11 ¾ a bushel, and hitting a fresh 2009 low of 3.10 ½ a bushel earlier.

At this low, near-term corn had plunged 31% from a June 2 high. A couple more days like this and, once the crop slipped below a $2.90 a bushel, it would be retracing territory not seen since October 2006.

The crop's price has been particularly hurt by a period of benign weather in the US, coming as it does within the crucial pollination period, promising high yields.

And the 71% of US corn rated good or excellent in Monday's US Department of Agriculture report was the highest since 2004 at this time of year.

Beans slip

Indeed, many observers are forecasting high corn yields in the US, with a report from University of Illinois economist Darrel Good saying that production could come in 762m bushels higher than current USDA forecasts.

Soybeans, meanwhile, slid 25.75 cents, or 2.5%, to $10.07 a bushel for August delivery, wiping out much of the rebound in the last couple of days.

Good weather and crop condition is again partly to blame, although the prospect of the sell down of some Chinese stocks on Thursday has also unnerved some investors.

Cocoa bucks the trend

Softs did not suffer quite the travails of grains, with cocoa continuing its march higher - at least in London, where the September contract added £16 to £1,824 a tonne.

The strong dollar held back New York cocoa somewhat, with the September lot down $4 at $2,684 a tonne.

Still, headway was not easy to come by, with London coffee and sugar closing lower.

And New York orange juice felt the weight of profit-taking, dropping 1.5%, although remaining 2.2 cents above the $1 a pound mark.

Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069