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Evening markets: jumping beans inspire crops rally

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Soybeans soared 4%, inspiring a rally in Chicago crops on Monday, helped by fresh concerns of a market squeeze, and by the spread of optimism through financial markets.

Crude oil hit a 10-month high of $74.81 a barrel in New York as investors continued to bask in Friday's comments from US Federal Reserve chairman Ben Bernanke of "good" prospects for a return to global economic growth.

Crude movements often act as signals for crops, many of which are used in biofuels.

Stocks continued to rally, setting New York's S&P 500 share index on course for its longest winning streak this year.

China drought?

In Chicago, near-term soybeans were especially blessed as investors sidelined doubts about demand which undermined prices last week.

There was some relief that last week's ProFarmer tour of Midwest crops had indicated crops roughly in line with official US expectations, rather than supporting thoughts of the record yields that some analysts are talking of.

There was some concern at talk of drought in China hurting crops in two of China's main growing provinces, Jilin and Heilongjiang.

"Jilin accounts for about 13% of China's total grain crop, and Heilongjiang produces around 40% of China's bean crop," Vic Lespinasse, the GrainAnalyst.com analyst, said.

He added: "China's buying a total of 896,000 tonnes of US beans last week underscores this bullish weather situation."

'Technically bullish'

September soybean stood up 39 cents at $10.62 a bushel at 17:00 GMT, having topped $10.70 a bushel earlier.

The November contract was up 23.75 cents at $9.96 ¾ a bushel, after earlier returning above $10 a bushel for the first time in a week.

"Traders are keeping an eye on the $10 level," Mr Lespinasse said.

"The November contract has traded above this level several times already today and a close above this mark would be technically bullish."

Spread the word

Soybeans' performance also spilled over into other crops, helping September corn place further ground between itself and last week's low of a little over $3.04 a bushel. The contract stood 3.75 cents higher at $3.25 ½ a bushel, with the December lot up 4.5 cents at $3.30 ¾ a bushel.

Wheat for September gained 9.5 cents to $4.69 ¾ a bushel, with the December contract squaring up for another attempt to get back above $5 a bushel. The lot added 9.75 cents to $4.97 a bushel.

European contracts also did well, with London contracts adding £1.75 a tonne pretty much across the board. That left November at £98.00 a tonne and took January to 50p above £100 as tonne.

Paris milling wheat was unanimous in E2.25 rises, taking the November lot to E129.00 a tonne, while November rapeseed ended up E3.25 at E280.00 a tonne.

Sugar curb

Among softs, London white sugar continued to retreat – slowly – from its all-time high of $589.9 a tonne earlier this month.

News that India is barring sugar buyers from holding stocks equivalent to more than 15 days' demand helped tempt many investors to resist the temptation to take profits.

London's September contract ended down $3.0 at $550.0 a tonne. New York raw sugar managed to recover from early lows to stand 0.03 cents higher at 21.87 cents a pound.

London cocoa for September, however, looked in better health than its New York counterpart, ending down £4 at £1,868 a tonne while, across the Atlantic, it was trading down $36 at $2,913 a tonne.

By Agrimoney.com

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