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Evening markets: late rebound bolsters crop prices

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Chicago crops rediscovered some mojo in late trade following early losses after a key US Department of Agriculture report viewed as modestly bullish for corn, but not so hot for soybean and wheat prices.

Corn indeed proved the strongest of the big grains throughout live trading in Chicago, standing 1.8% higher at $3.93 a bushel in late deals.

The USDA, citing frost and rain, reduced its forecast for the domestic harvest by 97m bushels, more than traders had expected.

But soybeans trimmed losses too, standing 1.75 cents lower at $9.62 ½ a bushel for the November lot, which had earlier touched $9.46 a bushel.

The better traded January contract was down 3.75 cents at $9.68 ¼ a bushel, more than 16 cents above its intraday low.

Wheat, meanwhile, which was depressed to $5.07 ½ a bushel by a forecast of lower US exports, rebounded to $5.22 a bushel, up 2 cents on the day.

'Modest buying'

The reason for the revival wasn't immediately clear. "Selling seems to have finally run its course, sparking modest buying," as Vic Lespinasse at GrainAnalyst.com put it.

Earlier, funds sold an estimated 3-4,000 contracts of each of the big three crops.

External markets seemed to be providing little support, with the dollar trading a touch stronger, taking the euro back to $1.4939 and so making US exports less competitive.

Shares dipped, as did oil, a pricing signal for crops used as biofuels, which lost 1.8% to $78.02 a barrel.

Sure, as France's Agritel noted, "agricultural commodities markets are still nervous with a US harvest delayed compared to previous years".

But with harvest forecasts seeing drier weather in the six-10 day window, and staying with a prediction of modest weekend rains over the Midwest, that hardly looked a huge factor on Tuesday.

European grains weaken

Whatever the reason behind crop's late upturn, it came too late to prevent a negative finish in Europe, despite the weaker euro.

Paris milling wheat for November ended down E0.75 at E124.75 a tonne, with the better-traded January lot down E1.75 at E129.50.

London November feed wheat finished off £0.25 at £104.85, with its January partner slipping £0.30 to £106.85 a tonne.

February rapeseed slipped E0.75 to E268.00 a tonne.

Coffee roasted

And it didn't reflect the softs market either, where London robusta beans had a stinker of a day, slumping 6.7% to $1,320 a tonne for January delivery.

Decent harvest progress in Vietnam, the biggest robusta producer, was blamed for the decline.

New York arabica beans weren't doing much better in late trade, down 4.4% at 133.90 cents a pound for December.

Rain on cane

Sugar fell even with what might have been considered bullish news – further rain delays to the cane harvest in Brazil's important Centre-South region.

The amount of cane crushed in the second half of October was, at 30.2m tonnes, down 10% year on year and 14% from the previous fortnight, trade data showed.

Yet white sugar for December fell $6.30 to $574.80 a tonne in London, with New York raw sugar for March down 1.9% at 21.99 cents as pound.

Cocoa for March dipped 2.3% to $3,140 a tonne in New York, a decline traders blamed on technical weakness after it fell through support levels.

By Agrimoney.com

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