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Evening markets: profit-takers pick at commodities

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Optimism left many commodities markets early for the weekend, leaving bears and profit takers to snipe at prices.

Crops ignored cues from oil, still basking in the glow of an upbeat Goldman Sachs report, to recover from early lows, and indeed cross $70 a barrel at one point.

Indeed, palm oil did quite the opposite, turning a small midday gain into a 1.9% closing drop, its worst fall for two weeks.

The 49 ringgit slide to 2,520 ringgit a tonne for Bursa Malaysia's benchmark August contract also represented the fourth successive daily loss.

"It was profit taking towards the closing that brought down the market," a Kuala Lumpur trader told Reuters, the news agency.

Informa factor

Chicago wheat wasn't in much better health, standing 1.6% higher at $6.25 ¼ a bushel at 17:00 GMT for the July contract.

An estimate from Informa that US winter wheat production would hit 1.51bn bushels, 11m bushels above US Department of Agriculture estimates, depressed sentiment

In Europe, Paris wheats ended E1.00 down across the piste, taking August to E147.25 a tonne. London wheats were mainly unchanged, getting some support from a weaker pound.

Chicago corn was also lower, off 2.75 cents at $4.45 ¾ a bushel amid reports of rain where ground is too dry in the US Midwest, and dry spells where it is too wet.

Stocks support

Soybeans, however, did stage some recovery, at least for old crop beans, thanks to lingering concerns of short supplies.

"Many analysts think ending bean stocks will fall well below 100 million bushels by the end of August," Vic Lespinasse, GrainAnalyst.com's veteran market commentator, said.

The July contract stood up $12.32 ¾ a bushel, 2.75 cents up on the day and well above an earlier low of $12.11 ½ a bushel. Forward contracts remained in negative territory.

Nice, nice, nasty

Many softs were lower too. Orange juice for July closed down 1.25 at 90.45 cents a pound, its fourth negative close in a row. Traders blamed technical reasons, with charts looking a "little bit heavy", according to one.

And July arabicas tumbled 3.1% to 134.90 cents a pound in New York on profit taking.

Romain Lathiere, a fund manager with Diapason Commodities Management, said: "Coffee is decreasing a bit because we've seen a very, very nice upturn movement since the end of April."

However, cocoa repeated its recent trend of closing the opposite way to other softs.

New York's September contract added $4 to $2.726 a tonne, with its London comrade gaining £12 to £1,766 a tonne.

By Mike Verdin

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