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Evening markets: crops miss bullish signals

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Thursday had the makings of a good day in Chicago. But it wasn't looking that way in afternoon deals, with all the key contracts showing losses.

The dollar was lower, typically a good sign where US exports, such as good commodities, are concerned.

Indeed, government data showed good weekly export sales, at least for wheat, at 479,000 tonnes, and soybeans, at 541,000 tonnes for old crop and 292,000 tonnes for the coming harvest.

Corn was the exception, at 541,000 tonnes old crop and 292,000 tonnes new crop, a little below traders' expectations.

Still, oil was higher, helped by economic optimism which swept equities higher too. Higher oil, up 1.4% at $71.13 a barrel for New York crude, is often a good sign for crops, such as corn, used in making alternative fuels.

Indeed, it was credited for helping Kuala Lumpur palm oil close up 2.2% at 2,515 ringgit a tonne.

Soybean anomaly

Still, Chicago's September corn contract lost early gains – it jumped to $3.38 ½ a bushel at one stage – to stand at $3.26 ¾ a bushel at 17:20 GMT, down 4 cents on the day.

Some traders reckoned a touch of profit-taking was involved, after recent gains, with others throwing doubt on the strong demand figures in Wednesday's US Department of Agriculture supply and demand report.

Soybeans were, in the main, lower too, with the strong export data apparently already factored in. November beans, the best traded contract, lost $11.75 cents to $10.32 ¼ a bushel.

The rise in August beans to $12.41 ½ a bushel at one point, the strongest since early July, was something of an anomaly.

The contract will be taken off the boards tomorrow and is little traded, at 1,400 lots compared with 84,000 for its November counterpart.

Forecast raised

Wheat remained solidly in the doghouse, amid continuing expectations of bumper crops and huge stocks.

Chicago's September contract was 5.5 cents lower at $4.84 ¾ a bushel, but at least avoided setting a fresh 2009 intraday low, as it did on Wednesday.

European wheats did better, despite Strategie Grains becoming the latest analysis group to raise forecasts for Europe's crop. It increased its estimate by 3.5m tonnes to 130.0m tonnes.

Paris wheat for November added E0.25 to E131.50 a tonne, with London's November contract adding £0.50 to £98.10 a tonne.

Sugar in demand, once more

Softs were an altogether better place for bulls to be.

In London white sugar, at least, which set a new record of $589.90 a tonne, for October delivery, before retiring to close at $574.8 a tonne, up $4.8 on the day.

At its peak, near-term white sugar was up 86% this year.

Its New York buddy, October raw sugar, was doing less well, failing – just – to retake the 28-year high of 23.33 cents a pound hit on Wednesday before retreating to 22.48 cents a pound, down 0.49 cents on the day.

Thursday's sector highlights included news of a plea by US food companies, including Kraft, General Mills and Hershey, to ease sugar import restrictions.

Cocoa did better on both sides of the Atlantic, getting caught up in the general economic optimism, which stimulated hopes for demand.London cocoa for September added £19 to £1,829 a tonne, while its New York counterpart gained $32 to $2,894 a tonne

By Agrimoney.com

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