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: heat lifts wheat. Sugar ends hotter still

Twitter Linkedin eCard

It's hot in Kansas.

Wichita, the biggest city in Kansas state, recorded its earliest 100-degree Fahrenheit heat ever (actually on Monday), which may be good news for makers of air conditioners, but bad news for farmers, only exacerbating the water shortage which has for months been besetting their hard red winter



That kept things warm too in Kansas City (which for some reason is in Missouri state), where hard red winter wheat futures are traded, on a day when the macro factors which have been pressing on commodity prices took a back seat.

The condition of the Kansas winter wheat crop, America's biggest, rated "good" or "excellent" fell further in the US Department of Agriculture data released overnight - by three points to a historically weak 18%.

And, with temperatures soaring, analysts aren't holding out much hope of imminent improvement.

'No relief'

"In 1996, it was very dry, before a changing weather pattern in May pulled the crop up," Jerry Gidel at North America Risk Management Services said.

"I don't see any sign of that happening this time yet."

At Pitguru, Matthew Pierce said: "There is no relief for the US hard red winter wheat regions, with excessive heat now moving in."

So Kansas wheat stood out as the best among the grains on Tuesday, gaining 1.5% to $9.28 ½ a bushel, with Minneapolis spring wheat, which was boosted by the surplus of moisture which is holding back US and Canadian sowings to one of the slowest-ever paces.

The Minneapolis July lot added 1.5% to $9.59 ¼ a bushel, with Chicago soft red winter wheat dragged up 1.0% at $7.98 ¾ a bushel.

In fact, with conditions too wet for comfort for soft red winter wheat too, "all three classes of wheat have issues", broker US Commodities said.

Report ahead

Unlike on Monday, that performance was enough to beat European contracts. Paris's best-traded November lot added 1.25 to E228.75 a tonne (with the volatile May contract expiring with a 1.0% dip), coming up against headwinds from a reviving euro, as another Greek bailout loomed.

London's November lot added 0.7% to £179.00 a tonne held back by some recent rains (of 40mm or so around's headquarters in western England) for dry crops.

And back in Chicago, wheat beat


too, following huge sowings by US farmers in western Corn Belt areas last week, sowing an area the equivalent of Denmark and Switzerland combined.

Furthermore, ahead of an important US Department of Agriculture crop briefing out on Wednesday, "some in the trade are preparing for the report to be to be a little bit negative the corn market", Benson Quinn Commodities said, highlighting in particular recent weakness in corn exports.

Eastern concerns

That was enough to counteract the observation that, while western Corn Belt sowings are going fine, eastern ones are not, with Indiana and Ohio growers completing less than 5% of corn plantings.

While traders were "trying to find a reason" that the overall sowings numbers were "bearish, I do not see that in any way", Mr Pierce said.

"The trade expects an additional 1.7m-1.85m corn acres out of Ohio, Indiana, Pennsylvania and Michigan. What are the odds of this coming through?"

Still, corn for July eased 0.25 cents to $7.07 ¼ a bushel, with the new crop December lot falling 0.7% to $6.52 ¾ a bushel.

China demand revives

With a healthier pace of soybeans seen as lowering the risk of farmers switching to


, which can be later sown, the oilseed managed a positive close despite the weight of upgrades to South American crops.

Oil World raised its estimate for the Brazilian crop by 500,000 tonnes to a record 73m tonnes, with Argentina's pegged 500,000 tonnes higher to 49.5m tonnes.

Brazil's official crop supply agency, Conab, lifted its estimate for the domestic harvest by 1.4m tonnes to an even bigger record, of 73.6m tonnes.

Nonetheless, Chicago soybeans for July ended up 0.2% at $13.38 a bushel, with the new crop November contract gaining 0.2% to $13.22 ½ a bushel.

Data showing stronger soybean imports from China, up 10.5% at 3.88m tonnes month-on-month in April, helped too.

'Hard time'

In fact, this time it was the turn of the soft commodities to post the most convincing gains, notably


, which soared 4.3% to 21.87 cents a pound in New York for July delivery, continuing a rise, fall and rebound which is looking spookily like that last year.

The revival was attributed to a range of technical factors, with the market considered firmly "oversold", with buying triggered by talk of shipping delays in Brazil, the top exporter, and of buying by end users calling time on the correction for now.

"There is talk around of port congestion in Brazil already," Thomas Kujawa at Sucden Financial said, noting also an early Ramadan festival, in August, which involved considerable feasting, after dark, and regulatory data showing a return of funds to adding net longs in the sweetener.

"The shorts have had a hard time it seems." For once.



soared its 6.0-cent daily limit in New York, to 151.40 cents a pound for July delivery, in a rally viewed as largely down to caution and short-covering ahead of Wednesday's USDA report.


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