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: crops dispel fears of turnaround

Twitter Linkedin eCard

Chicago's worst fears of a Turnaround Tuesday appeared misplaced going into end-of-day deals, with corn and soybeans, at least, managing to build on the gains of the last session.

Sure, wheat struggled. The March contract stood at $5.43 a bushel at 18:30 GMT, down 7.75 cents on the day and more than 11 cents below its intraday high.

But that still left it well up on the week, following Monday's strong rallies among Chicago crops.

And some external forces were set against crops, with the dollar firming to $1.5433 against the euro. A stronger greenback makes US exports such as crops less competitive.

With March corn up 0.5 cents at $4.16 ½ a bushel, and January soybeans 9.5 cents higher at $10.28 ½ a bushel, December 29's credentials of being a Turnaround Tuesday – when crops reverse a strong trend in the previous session – looked poor.

In, fact, at Vic Lespinasse, analyst for, said: "The dollar is still a little higher, making this recovery in all pits except wheat even more impressive."

Liquidation threat

Still, analysts urged investors not to get too carried away, given the wafer thin trading volumes.

"There is still very little news in the market other than funds really want to own corn and soybeans," Darrell Holaday at Country Futures said.

"This buying has been done on a backdrop of very light holiday trade, so it does not take much buying interest to move the market higher."

US Commodities noted that latest regulatory reports on investment positions showing funds holding a net long position of 134,555 contract in corn, the biggest of the three big crops.

"[This]argues that this is the grain that is most vulnerable to long liquidation," the broker said.

Soybean surplus

Meanwhile, soy complex bulls have the potential of softening Chinese demand, to judge by a report from the official grain think tank, CNOGIC.

"China's CNOGIC in a special report indicated that China will face a surplus of soybeans in early 2010 due to record large imports of over 12m tonnes and increased producer selling ahead of the Lunar New Year holiday in mid February," US Commodities said.

"The impact on the Chinese market will likely be overcapacity of crush which will lead to lower soymeal prices as livestock slaughter rates rise into the New Year.

"China has been a big buyer of US soybeans and slowing demand is expected from here forward as margins retreat."

And this before any reminder of the imminent prospect of South American harvests.

'Overbought territory'

Staying in South America latest data showing a disappointing, rain-plagued harvest in Brazil, the world's top producer, helped support London white sugar prices.

That and a reaction to a strong performance by New York raw sugar on Monday.

"The London market had a fair amount of catching up to do," David Sadler at Sucden Financial Sugar, said.

Indeed, it hit a fresh record of $707.20 a tonne for March delivery before retreating to close at $700.20 a tonne, up $6.20 on the day.

New York's March contract was less in demand, however, easing 1.8% to 26.77 cents a pound.

Some technical indicators showed the contract moving "well into overbought territory", Mr Sadler said.

"With the volume still fairly light, one may expect the markets to remain quite volatile," he added.


Twitter Linkedin eCard
Related Stories

Evening markets: Soybean futures gain, cotton prices jump on US data

Initial USDA forecasts for crop supply and demand for 2018-19 lift soy and cotton prices, but are not so well received in the cotton market

Weekly grain market view from Europe, February 23

EU cold snap could damage crops... UK market prices in closure of Vivergo ethanol plant... Rising Russian wheat prices...

Evening markets: Argentine moisture slips up soymeal rally. But weather revives wheat

Meal futures dip, a little, for the first time in 12 sessions. But wheat futures gain, as drought spreads in Kansas, and cold reaches Europe

Morning markets: Ag futures ease, as traders await key 2018 forecasts

US officials will later on Thursday issue the first of a series of forecasts for US crops in 2018-19. Markets are cautious in the mean time
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