Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Evening markets: weak dollar powers crops higher

Twitter Linkedin

Fresh weakness in the dollar put commodities back on the front foot, helping soybeans and cocoa to multi-month highs and sending volatile wheat back into an upswing.

The dollar lost ground against both euro, which topped $1.4050, and sterling as fears waned of an imminent rise in interest rates.

That spurred buying in a broad range of commodities, including one of its standard bearers – oil – which, for New York crude at least, crossed back above $70 a barrel. The July contract stood 3.0% higher at $70.16 a barrel at 18:30 GMT, with Brent crude for July delivery up 2.5% at $69.59 a barrel.

"The dollar is down, and that's supporting everything," Vic Lespinasse, Chicago market watcher for, said.

Soybean spread

Among Chicago grains, soybeans stole the headlines by closing at $12.44 ½ a bushel, for the July contract, the highest for a benchmark lot for more than nine months.

Official US figures on Wednesday are expected to show America's soybean stocks, sapped by strong Chinese buying dropping to a five-year low of 114m bushels. Many analysts believe the fall will leave inventories near the 32-year low of 103m bushels.

However, the July contract's 11.75 cent rise was outpaced new crop lots. March 2010 soybeans, for instance, soared 24.5 cents to $10.80 a bushel. That may be a sign that investors are banking on buyers deferring purchases rather than locking into near-term beans at a large premium.

Springing wheat

And even that was overshadowed, in percentage terms, by wheat, which soared 16.5 cents to $6.14 ½ a bushel, continuing its recent spell of volatility.

That appeared linked to technical reasons rather than fundamentals, traders said, with Kazakhstan saying it expected an extra 15-20% from this year's grain harvest.

The same went for rough rice, which soared 3.9% to $12.955 a hundredweight despite widespread expectations of a rapid rebuilding of global rice stocks.

Corn, which didn't suffer quite the recent correction as wheat, didn't enjoy the rebound either, adding 2.1% to $4.43 ¼ a bushel, modestly beating new crop contracts.

'Inflation hedge'

Among softs, the thud of the declining greenback levered New York cocoa back above $2,800 a tonne at one point for the first time in four months, although the benchmark September contract ended at $2,792 a tonne, up 2.7% on the day.

"The dollar is the main driver at the moment - people are looking for an inflation hedge," Rabobank trader Nick Hungate told Reuters, the news agency.

Stronger sterling held back cocoa somewhat in London, where the September contract closed up £20 at £1,785 a tonne.

New York sugar also closed higher, up 1.2% to 15.52 cents a pound for the July contract, with coffee adding 0.9% to 131.25 cents a pound for Arabica beans.

By Mike Verdin

Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains
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 the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069