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Evening markets: demand hopes lift beans and sugar

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Friday belonged to soybeans and sugar, both of which were boosted by prospects of strong demand, while wheat remained under pressure from the mountain of global supplies.

New York raw sugar for October jumped 5.1% to a fresh 28-year high of 23.63 cents a pound as the prospect of the festival season in India, the world's biggest consumer of the commodity, returned attention to the tightness of the market.

Besides a collapse in Indian production, part down to weather and part to a switch by farmers to grains while prices were high, output in Brazil, the top-ranked producer, suffered for heavy trains.

Raw sugar remained near its high in late New York trade, standing up 4.5% at 23.52 cents a pound at 17:15 GMT. London white sugar for October closed up 2.8% at $573.9 a tonne.

Buying competition

Old crop soybeans had the boost of the US reporting yet more sales to China, this time for 110,000 tonnes, with Taiwan also in the market.

Chinese has now purchased some 8.4m tonnes of beans from the US this season, twice the amount of a year before.

"The cash bean market here in the US remains very strong as exporters vie with crushers for dwindling supplies, driving up prices in the process in both the cash and September futures markets," Vic Lespinasse, Chicago marketwatcher for GrainAnalyst.com, said.

The start of Argentina's farm strike did little to hurt soybeans' cause although, given the country has few beans to sell after a bad harvest, the immediate impact is not expected to be that great.

September soybeans were 2.3% higher at $11.40 � a bushel.

Traders' dilemma

However, new crop November beans were not so cheerful, adding just 0.7% to $10.03 � a bushel, undermined by the prospect of a bumper harvest � provided the weather stays good.

The crop's weak spot � and corn's too - is backwardness, which means a late harvest and greater potential for frost damage.

"The market is caught between two extremes currently: if an early freeze hits the crops, prices will shoot sharply higher," Mr Lespinasse said.

"On the other hand, if we do not have an early freeze, we will have a record bean crop and the second largest corn crop ever, which could drive prices much lower.

"Many traders simply don't know what to do in this situation and they are being extra cautious."

Cautious for corn meant sending the September contract 4 cents lower to $3.19 a bushel, while the better-traded December lot was 2.25 cents lower at $3.27 a bushel.

Wheat stumbles

Still, that was better than wheat, which remained under the cosh following Thursday's International Grains Council report showing stocks on course for an eight-year high.

Chicago's September lot stood down 13 cents at $4.62 a bushel, within 5 cents of its 2009 low. December wheat lost 13 cents to $4.90 a bushel.

It was weaker across the Pond too, ending down E1.00 at E128.50 a bushel in Paris, for November delivery, and down �1 at �100.00 a tonne in London.

Farmers come forward

A rise in wheat back above a ton a tonne appears to have eased a sellers' strike.

"It appears that enough wheat has now come forward to satisfy the current demand," Hugh Schryver at Glencore said.

"Consequently prices have eased a little."

Still pries remained "too expensive now to export to the usual destinations such as Spain", he added.

"Wheat from the Baltic states is undercutting UK supplies by �3-4 a tonne."

By Agrimoney.com

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