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Evening markets:sowings hopes keep corn price under the cosh

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Many commodities altered course through the day as investors reassessed ideas of what the death of Osama Bin Laden meant for asset values.

Oil

, for instance, recovered most of its losses, recovering from $111 a barrel in New York to above $113 a barrel as investors wondered really how much the prospects of Middle East stability had improved with the death of the Al-Qaeda head.

Indeed, there was some thought of a reprisal attack by Islamic militants.

Silver

recovered half its early losses of more than 5%, while the

dollar

turned moderately in favour of dollar-denominated commodities in shedding gains to stand marginally easier as of 19:30 GMT.

But

corn

refused to give up its grumps, as attention turned to the weather, and the window which looks like giving

'Aggressive planting'

"There is little doubt that the north western Corn Belt areas will plant more corn this week than was originally anticipated and that has certainly provided some of the pressure," Darrell Holaday at Country Futures said.

Rival broker US Commodities said: "This weather this morning provides an open window for the northern Plains and western Corn Belt." The eastern Corn Belt "also looks drier this morning versus the weekend forecast".

To sum up, the week should enable "aggressive planting in all of the western Corn Belt, north half of Illinois, northern Ohio and northern Indiana", with the area from the Ohio Valley to the Mississippi Delta "stalled".

So while the planting pace as of Sunday, to be revealed in US Department of Agriculture data, will be well below the 40% average by now, with the market estimating a figure of 15-16%, there is a real chance of catch-up , which was what the market traded on Monday.

Funds sell

Indeed, while months often begin with a bout of buying from funds flush with fresh cash, not this time.

"While they may have more buying to do, it may not present itself unless the ag markets resume upward momentum," Benson Quinn Commodities said.

In fact, funds were sellers of an estimated 12,000 corn contracts on the day, (along with 2,000 soybean and 1,000 wheat lots).

Chicago's July lot fell 2.9% to $7.34 ½ a bushel, if not shedding all of the gains of the last session, while the new crop December lot fell 1.2% to $6.61 ¼ a bushel.

Strength

sapped

The grain's performance weighed on

wheat

, which lost early headway to finish 1.2% down at $7.91 ¾ a bushel for July in Chicago, the home of trading in the soft red winter variety.

In Kansas, July [hard red winter] wheat ended down 1.3% at $8.90 ½ a bushel, while spring wheat fell 1.1% to $9.37 ½ a bushel in Minneapolis.

"Concern about dry conditions in the hard red winter area along with cold overnight temperatures and wet forecasts for the hard red spring wheat areas prompted a strong early rally in wheat. But when the corn market could not hold gains, the wheat retreated," Mr Holaday said.

US Commodities noted too that soft red winter wheat "will deteriorate on the rain".

'China out of the market'

Soybeans

, however, kept their head up, ending down 1 cent at $13.93 a bushel for July, and off 0.5 cents at $13.73 ¾ a bushel for November.

Sure, as US Commodities said, "China is basically now out of the US soybean export market. The domestic market will now be the leader".

But this was already known. What is positive for the oilseed is the prospect of decent progress in corn sowings, lowering the chance of growers switching instead to soybeans, which can be planted later.

'Unexpected rains'

Among soft commodities,

cotton

returned to downward swing, with the July lot closing down 2.3% at 154.45 cents a pound in New York.

There was some disappointment, technically, at a weak start, signalling that a recovery on Friday may have been a blip in a downward trend, rather than anything more substantial.

Indeed, Terry Roggensack at Hightower Report had noted talk of "better buying interest from funds early this week, in contrast to the long liquidation selling from last week".

However, he also highlighted "unexpected rains for eastern Texas over the weekend", improving sowing prospects for the parched US cotton-producing state.

Speculative buying

Coffee

was an altogether happier situation for the bulls, rising 1.8% in New York for July delivery to close at 305.10 cents a pound – a 34 year high. Indeed, the first time a nearest-but-one contract had ended above $3 a pound since 1977.

Still, volume was thin, on a day when many markets, such as China, Russia, and the UK were closed for a labour day holiday.

And traders failed to reveal any particular spark behind today's rise other than further buying by funds getting into the commodity, for which demand is proving more resilient than demand.

The latest US regulatory data, late on Friday, showed speculators (as included in a broad definition) continuing to increase their net long exposure to cotton n the week to April 26, to some 40,000 lots, from 28,000 lots a month ago.

By Agrimoney.com

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