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: grain buyers' shopping spree lifts prices

Twitter Linkedin eCard

New month, new look?

Bulls certainly had the run of both grain and soft commodity markets on Tuesday, and some analysts attributed the improved sentiment in part to the start of July, and a fresh financial quarter, bringing in fresh fund money.

But there were fundamental reasons for prices to head upwards too.



, these were familiar, including expectations that Unica, the Brazilian cane industry group, will cut its forecast for output of the sweetener in the top producing country.

"The market remains backed up by nearby demand, congested port terminals in Brazil, expectations of a sharp reduction in Unica's estimate for the 2011-12 crop in a report due later this month, a weaker dollar and new fund buying," Nick Penney at Sucden Financial said.

"It seems the market has been caught short again and we suppose the next target will be 30 cents a pound."

In fact, New York's October sugar contract finished 1.5% higher at 27.60 cents a pound. London white sugar for August closed up 0.8% at $771.30 a tonne having hit $78.70 earlier on, the highest since February.

Cocoa doubts


for September finished up 0.9% at £2,023 a tonne in London and 2.4% higher at $3,227 a tonne in New York, amid doubts over output in Ivory Coast, the top producer and exporter of the bean.

"After an excellent 2010-2011 harvest, attention is now turning to the next season," Commerzbank said.

"It is doubtful whether the weather in the m


in cocoa growing region West Africa will be as good as in the current season."


added 2.1% to 269.65 cents a pound in New York, for September, in late deals amid forecasts of further cool weather for Brazil, the top producer of arabica beans as well as sugar, although temperatures are not expected to fall below freezing. At least, in main coffee districts.

'Active buyer'

Still, these gains were swamped by those in grains, especially for near-term contracts, on evidence that last month's liquidation was sparking a rash of interest among buyers, notably in Asia.

These buyers include China, whose presence on


markets is especially sensitive to traders.

"Rumours abound that China is an active buyer of US corn, with latest being China purchased upward of 500,000 tonnes over the holiday weekend and may have purchased upward of 2.5m tonnes of US corn last week," Benson Quinn Commodities said.

And the facts point to such trade at least making financial sense.

"The interesting thing is US corn is also cheaper than Chinese corn including all taxes- this is something to watch closely," Matthew Pierce at PitGuru said.



too, "Chinese crush margins are back in the black with US soybeans below Chinese values including all taxes", he added.

'Worrying heat ridge'

There was also some talk of weather concerns although, as ever, much lay in the interpretation.

Benson Quinn said that US "weather forecasts for the next two weeks are mostly favourable and are seen limiting gains". said that latest weather models show that "a worrying heat ridge remains intact over the next 14 days.

"However, right now, none of the models are bringing the ridge/dome north or north east," where it risks causing greater damage.

Still, there is a growing list of weather threats abroad, with Mr Pierce noting "issues developing in Northern China" and "continued 100 degree Fahrenheit temperatures in central Mexico [which] are hammering their winter corn late development and their summer corn early development".

Furthermore, "Ukrainian rains have cut their crop expectations even further", while "heat in the Russian plains is making the former Soviets sweat just a little".

Grains soar

With a lack of deliveries – still - against expiring July corn and soybean contracts further supporting sentiment, Chicago corn for July entered the last half an hour of trade up 6.3% at $6.81 a bushel for July delivery.

The better-traded December lot was 1.7% higher at $6.07 a bushel.

Soybeans for July gained 0.4% to $13.27 a bushel, maintaining a slow but steady rise, while the November lot edged 1 cent higher to $13.13 ½ a bushel.


performance was more like that of its grain peer, although against the old crop July contract did best jumping 4.2% to $6.09 a bushel. The new crop September lot was 3.8% higher at $6.35 ½ a bushel.

And, in Europe, Paris wheat for November closed up 2.3% at E197.50 a tonne, with London's November lot adding 1.8% to £165.50 a tonne.


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