Linked In
News In
Linked In

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

Morning markets: sowings, dollar, Goldman raise crop prices

Twitter Linkedin eCard

Asian trading hours filtered out the bad karma in markets stemming, mainly, from the eurozone debt crisis.

The steep losses in Western share markets were not repeated in Tokyo, where stocks closed up 0.2%, while Shanghai and Hong Kong shares showed only marginal losses in late deals.

And, importantly for commodity markets, the


edged lower, down 0.2% against a basket of currencies as of 07:30 GMT (08:30 UK time) so improving the competitiveness of dollar-denominated assets on export markets.

Add in a report from Goldman Sachs (of which more to follow on warming back to raw materials and the stage was set for gains in many commodity markets. New York


added 1.1% to return well above $98 a barrel, while London


rose 1% or so.

'Low end of expectations'

Agricultural commodities had the extra boost of a weekly US crop progress report which showed farmers a little more behind in sowings even than had been expected, with 79% of


sown, for instance, up 16 points on the week, but behind forecasts of a figure of at least 80%.

(On average, 87% of corn has been sown by now.)



, "planting progress came in at the low end of expectations at 41% complete compared to 51% last year and five-year average", Kim Rugel at Benson Quinn Commodities said.

"Granted soybeans still have lots of time on the calendar to get in the ground, [but] the forecast across the south central and northern states were planting is the furthest behind remains wet through this week."

Indeed, at Phillip Futures, Kerr Chung Yang said: "Looking ahead, rainfall this week in the eastern US Midwest and in the South may continue to hamper corn and soybean plantings.

"This further raises the concerns about reduced acreage and yields for both crops."

Wheat's woes

For spring


, "seeding did pick-up to its fastest pace of the spring at 18 points this past week to 54%", Jerry Gidel at North America Risk Management Services said.

"But the two largest producing states [North Dakota] don't have half their acres planted yet and nationally 89% is usually done over the past five years."

Furthermore, winter wheat continued to deteriorate – and this despite some recent rains for hard red winter wheat crops which desperately need more.

While the proportion of the US crop in "good" or "excellent" condition stabilised at a low 32%, compared with 66% a year ago, the percentage deemed in "poor" or "very poor" condition edged one point higher to 46%. A year ago, the figure was 9%.

'Very poor weather'

Still, it was


which did the best in price terms, adding 2.0% to 157.00 cents a pound in New York for July and 2.3% to 122.50 cents a pound for the December lot.

"US cotton planting advanced from 42% to 57% complete last week, but this still remains slightly behind the normal seasonal pace," Luke Mathews at Commonwealth Bank of Australia said, highlighting that weather in US cotton-growing areas "remains very poor – drought in the west and floods in the east".

Furthermore, futures on the Zhengzhou exchange in China, the top consumer, grower and importer of the fibre, put in another firm performance, gaining 2.6% to 24,295 yuan a tonne for November delivery.

And cotton was, with corn, singled out in the Goldman report.

Scores on the doors

Among the big Chicago crops, soybeans led, on a near-term lot basis at least, managing a rise of 0.8% to $13.84 ¼ a bushel for July delivery, with the new crop November lot up 0.8% at $13.61 ¾ a bushel.

And wheat was not far behind, up 0.7% at $8.08 ½ a bushel for July and 0.6% to $8.55 ¾ a bushel for September.

Corn added 0.6% to $7.58 ¾ a bushel for July, with the new crop December lot spurting 0.9% to $6.76 ¾ a bushel.

China concerns

Better sentiment was also evident in Asia's commodity markets, where

palm oil

for August added 1.0% to 3,387 ringgit a tonne in Kuala Lumpur, while


gained 2.2% to 375.90 yen a kilogramme for the benchmark October contract.

But can rubber's rally last? Besides the seasonal recovery in production in top exporter Thailand, "there is also concern that China's demand has slowed in recent months, in part due to series of tightening measures by Beijing to curb inflation", Mr Ker said.

China's imports of natural rubber fell 18%, month on month, to 175,200 tonnes in April.


Twitter Linkedin eCard
Related Stories

Evening markets: Soybean futures gain, cotton prices jump on US data

Initial USDA forecasts for crop supply and demand for 2018-19 lift soy and cotton prices, but are not so well received in the cotton market

Weekly grain market view from Europe, February 23

EU cold snap could damage crops... UK market prices in closure of Vivergo ethanol plant... Rising Russian wheat prices...

Evening markets: Argentine moisture slips up soymeal rally. But weather revives wheat

Meal futures dip, a little, for the first time in 12 sessions. But wheat futures gain, as drought spreads in Kansas, and cold reaches Europe

Morning markets: Ag futures ease, as traders await key 2018 forecasts

US officials will later on Thursday issue the first of a series of forecasts for US crops in 2018-19. Markets are cautious in the mean time
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 AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069