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Evening markets: export flops depress crops

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Soybeans led a slide in farm commodities, amid weak news on exports and good prospects for the US harvest, with a decline only overshadowed by that of sugar.

Funds once more pressed sell buttons in Chicago, getting shot of 2,000 wheat lots, 4,000 soybean lots and 5,000 in corn with an hour or so to go.

This time, external markets did not seem a major factor, with the dollar stable and shares higher, and oil only modestly lower.

That said, crops came up with plenty of their own sell signs, notably, for US investors, a double dose of bad news on exports.

'Just not competitive'

The first whammy was poor export sales data, fair for corn, at 564,000 tonnes, weak for soybeans, at 522,000 tonnes, and dismal for wheat, at 284,000 tonnes.

The second was Egypt's decision to rub US wheat further in the mire by ignoring it, once again, in a 120,000-tonne tender, which went to France and Russia instead.

"We're just not competitive," said Vic Lespinasse, Chicago marketwatcher for GrainAnalyst.com.

December wheat shed 6.5 cents to $5.14 ½ a bushel in Chicago in late deals and 7.25 cents to $5.19 ½ a bushel in Kansas.

Europe does better

That was enough from the world's benchmark wheat market to put some dampeners on French wheat, despite its export success.

Paris wheat for November ended down E1.50 at E127.00 a tonne although the better-traded January contract did better, closing flat at E131.75 a tonne.

Hugh Schryver, at grain merchant Glencore in the UK, said Europe's grain market would have seen the Egyptian tender result "as supportive, but would have been disappointed by the small volume purchased".

London wheat also did better for January, which closed up £0.50 at £107.20 a tonne, than November, which ended down £0.15 at £104.50 a tonne.

'Harvest friendly'

Back in Chicago, weather for the US corn and soybean harvests was also set against the bulls, promising little further in the way of delays.

"Harvest weather has improved," broker US Commodities said. "The weather for the most part is harvest friendly for the next 30 days."

And soybeans had the additional headwind of raised Brazilian crop estimates to deal with. Sure, the rise in the official forecast wasn't that large, at 300,000 tonnes or so, but it was enough to stoke fears for the huge South American supplies that are coming down the line.

Soybeans for November dipped 25.5 cents to $9.70 a bushel, with the better-traded January contract down 24.75 cents at $9.74 ½ a bushel.

Corn dipped 5 cents to $3.79 a bushel for December delivery.

Sour time for sugar

Still, these losses were modest compared with those suffered in sugar, which closed down 3.5% at 22.76 cents a pound in New York for March delivery.

The slide was blamed on technical rather than fundamental factors – notably a round of automated sell trades that kicked in when the contract got below 23.50 cents a pound. That drove the price to 23.00 cents a pound, triggering another round of disposal stops.

Cocoa also lost ground, closing down 2.3% at $3,218 a tonne for New York's December contract, with technical selling once again blamed.

By Agrimoney.com

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