RSS
Twitter
Linked In
News In
Markets
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Morning markets: crops firm on fund-buying hopes

Twitter Linkedin

Chicago crops made a bright start to the week, helped by a weaker dollar and the prospect of fund buying, while bearish data sent Kuala Lumpur palm oil to its lowest since Christmas Eve.

Palm oil for March slid 2.1% at one point to 2,572 ringgit a tonne after official data showed Malaysia's stocks of the vegetable oil jumping 15.7% last month to their highest for 13 months.

The benchmark contract had recovered to 2,580 ringgit a tonne, down 1.8%, by 07:20 GMT.

It was a different story in Chicago, where wheat hit $5.74 a bushel for March, the highest for the spot contract since the start of December, as a strong finish to crops in the last session inspired thoughts of further gains on Monday.

Fund buying ahead?

Friday's late revival in crop prices was credited to buying by index funds undergoing their annual rebalancing process, in which commodity weightings are adjusted back to base levels, meaning 2009's worst performers, such as grains, get bought at the expense of positions in flyers such as copper and sugar.

Funds were estimated to be buyers of about 10,000 contracts of corn alone on Friday, mainly in the dying minutes of dealing.

Another factor on traders' minds will be the release of a slew of crop data on Tuesday from the US Department of Agriculture expected to show cuts to estimates for American corn output (hit by weather) and soybean stocks (depleted by rising exports), plus a weak guess for winter wheat plantings.

That may be encouraging a little position covering, which for wheat means closing shorts.

Greenback eases

Meanwhile, the dollar was also a touch weaker following last week's disappointing US jobs data, making American exports, such as crops, more competitive on export markets.

It appears the currency has reverted to its historic pattern of declining on poor American data, as conventional logic would suggest, rather than strengthening as it did during the crisis months, when investors viewed the US economy as proxy for the global one, and reverted to the "safety" of the dollar at the first sign of trouble.

Soybeans also faced the support of stronger prices on the Dalian exchange in China, the world's biggest importer of the crop.

January soybeans were 8 cents higher at $10.21 a bushel, with the better-traded March contract up 5.75 cents at $10.27 ¾ a bushel.

'Buy on rumour...'

However, how long can it last?

"Word is that China is done buying US soybeans and will wait for the South American crop," Mike Mawdsley at broker Market1 said.

At Benson Quinn Commodities, Kevin Kjorsvik recalled the markets adage "buy on rumour, sell on fact".

He said: "One has to wonder if the steam in the market isn't about to run out soon as traders begin to implement the sell-the-fact portion of this trade sometime next week."

Still, for now wheat was up 3.25 cents at $5.71 ¾ a bushel, with March corn adding 0.5 cents to $4.23 ½ a bushel.

By Agrimoney.com

Twitter Linkedin
Related Stories

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

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too

Evening markets: ags overlook crumbs of comfort in Wasde to set fresh historic low

The Bcom ag commodity subindex ends at a fresh record low, as US export fears overtake upbeat interpretations of corn, cotton estimate revisions

Abares lifts hopes for sugar futures, but cuts its cotton price forecast

A downgrade to Australia curtails an upgrade in world sugar output expectations. But for cotton, Abares ditches ideas of a global production deficit
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com 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