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

Wheat price rebounds from two-year low

Twitter Linkedin eCard

Chicago wheat fell to its lowest price for more than two years, as a near-7% drop in Chinese stocks bit into sentiment across financial markets, before staging a remarkable comeback to close near its day high.

Shanghai's main share index closed down 6.7%, its worst fall in more than a year, amid rumours of a tightening in lending in the economy investors are relying on to pull the world out of recession.

Other shares lost ground, with the Standard & Poor's 500 share index down 0.9% in late deals and oil tumbling 4.3% to $69.64 a barrel for New York October crude at 20:00 GMT.

'Definitely bad news'

"It's negative sentiment given the very weak Chinese market," Eugen Weinberg, analyst at Commerzbank, told Reuters, the news agency.

"This is definitely bad news for the commodities sector."

China's economic recovery has been scripted to stimulate demand for a range of assets, including crops.

Bull points

However, while the decline in optimism initially hurt wheat badly, some bullish news eventually filtered through to stoke covering of short positions.

Among it was upbeat US weekly export inspections of 15.5m bushels, and some talk of the monsoon threatening Indian wheat production.

AWB, the Australian grain handler, said that the wheat market was showing signs of stabilising.

Meanwhile, some technical factors also came into play, with Monday the last day of August and the first day of deliveries for September contacts. Wheat deliveries on Chicago lots totalled 5,600 contracts, with none, as expected, on corn and soybeans.

Australian rain

Sure, the newsflow did not all go bulls' way, with Agritel, the French analysis group, saying Australia was on course for a harvest of more than 20m tonnes "thanks to beneficial rains last week and to few effects from El Nino".

Australia's forthcoming wheat harvest is one of the key unknowns which could provide, some, damage to estimates of huge global supplies.

But while September wheat at one stage dipped nearly 3% to $4.53 ¼ a bushel, the contract recovered to close up 4 cents at $4.71 a bushel.

December wheat dropped to $481 ¾ a bushel, a 2009 low, before reviving to $498 ¾ a bushel, up 3.5 cents on the day.

The revival came too late to help Paris milling wheat for November, which ended down E1.50 at E127.00 a tonne. London's futures market was closed for a public holiday.

Corn recovers

Back in Chicago, wheat's revival rolled over into corn, which ended up 5.25 cents at $3.26 ¼ a bushel for September delivery.

The December contract finished up 0.75 cents at $3.29 ¾ a bushel.

However, soybeans were less lucky. As a crop particularly dependent on Chinese demand, they are more vulnerable to Shanghai jitters, traders said.

'No frost'

Furthermore, the weekend failed to bring the frost that some forecasters had said was a possibility.

"There was no frost over the weekend in the [US Midwest] although temps did get as low as the upper 30s to lower 40s Fahrenheit [around 4 degrees centigrade] Victor Lespinasse at said.


Twitter Linkedin eCard
Related Stories

Evening markets: Ags drop as funds swap sides, befriending bears

The Bcom ag subindex closes back below its hard-won 200-day, amid talk of fund selling in both grains and soft commodities. Soybeans escape

Weekly grains and oilseed market view from Europe, March 16

Confused UK wheat market messages... importance of Black Sea weather... as EU set for another cold turn... slow EU rapeseed imports...

Morning markets: Corn, soybean futures gain ahead of US export data

... while wheat futures find fresh strength on US dryness worries. Palm oil manages, modest, headway too as Malaysia’s export decline slows

Evening markets: Soybeans reverse lower, wheat higher on changing weather ideas

Soybean futures fall to a one-month low, as Argentine wetness compounds pressure from elevated US sowings ideas. Cocoa, cotton gain
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