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Evening markets: crops miss out on market rally

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Crops struggled to cling onto earlier gains, despite firmer external markets, as benign growing conditions continued to eat away at the premium investors are prepared to pay to account for potential weather shocks.

UK and US shares managed rebounds, as sharp declines in the previous session tempted investors out of their shells.

Oil recovered too, with New York crude for September standing 2.8% higher at $68.62 a barrel.

Chicago crops, however, remained well below day highs, undermined by a dearth of bullish news.

'Showers drifting in'

What reports there were were, generally, unhelpful to prices, such as those showing a slide in cash prices for soybeans. Data last week showing worse-than-expected US crushings has dented assumptions that forecasts of low US stocks meant a tight market.

Meanwhile, weather forecasts look favourable, notably for Indiana and Ohio where a dry spell had begun to put crops under stress.

"Showers are drifting into that area as I speak, and are likely addressing many of those concerns," an analyst at Chicago-based broker Linn Group said.

"Wisconsin continues to see improvements in weather and crop fortunes."

'Very favourable conditions'

While America's spring wheat remains way behind in harvesting, thanks largely to delayed plantings in North Dakota, helpful weather has helped ensure it "remains in excellent shape".

At GrainAnalyst.com, Vic Lespinasse said that rain was forecast for the Midwest later in the week, along with cool temperatures.

"Conditions remain very favourable for corn and bean development," he added.

September corn stood 0.25 cents lower at $3.14 a bushel, with the December contract unchanged at $3.21 ¾ a bushel.

Wheat was 1.75 cents down at $4.70 a bushel for September delivery, and off 1.25 cents at $4.98 ¼ a bushel for December.

New crop November soybeans were also a touch weaker, down 0.25 cents at $9.54 ¼ a bushel, but the near-term September contract did better, adding 2.75 cents to $9.91 a bushel.

Rapeseed rises

Vegetable crops did better abroad too, with palm oil ending 1.7% higher at 2,375 a tonne in Kuala Lumpur and Paris rapeseed for November closing 0.6% higher at E272.00 a tonne.

Despite something of a correction late last week, rapeseed remains 11.5% above a three-year low hit at the end of July.

Paris wheat didn't perform quite so well, ending down 0.25 cents at E128.50 a tonne for November delivery, with London's November contract ending down 0.4% at £96.25 a tonne.

Sugar weakens

Among softs, London white sugar closed lower for a third successive day as investors took stock following its sharp run-up to all-time highs last week. October sugar ended $5.6 lower at $546.2 a tonne, 7.4% adrift of its peak.

In New York, raw sugar was, as traders likes to say, "consolidating" too, down 0.1% at 21.80 cents a pound, 6.6% short of last week's 28-year high.

Reports of favourable crop development helped sent London robusta coffee beans for September down 0.3% to $1,360 a tonne - a 10th successive day of decline.

New York arabica beans for September were 0.6% lower at 124.75 cents a pound.

Chicago hogs were doing somewhat better adding 0.7% to 45.00 cents a pound for October delivery although, given the contract remains near seven-year lows, short-covering was credited for much of the bounce.

By Agrimoney.com

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