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Wheat rebounds after failed bear attack

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Wheat took the limelight, making ground after a bear attack in Chicago failed to trigger the automatic sales that many traders had expected, raising thoughts that further losses in the grain may not be forthcoming for now.

Another lower close for Chicago grains had looked a near certainty after latest US forecasts cut the chances of a freeze, which would pose a risk to yields, and oil slumped more than 3.5% nearly to $68 a barrel.

Crude, a key factor in prices of crops such as corn used to make biofuels, was hurt by a surprise rise in US stockpiles of oil products.

But, while grains indeed opened lower, wheat's fall to $4.51 a bushel without uncovering a barrage of so-called sell stops – automatic trades placed in advance by traders – raised thoughts that investors' appetite for further losses in wheat was meagre.

'Mostly technical'

"The rally in wheat is mostly technical in nature, starting after the December contract took out its double bottoms on the chart… and didn't uncover any sell stops," Vic Lespinasse, GrainAnalyst.com analyst, said.

"This started a short-covering rally and brought in some fresh speculative buying, driving wheat progressively higher.

December wheat stood 1.9% higher at $4.64 ½ a bushel at 17:30 GMT.

The rise spilled over into corn, which recovered from $3.19 a bushel to stand at $3.31 a bushel, up 5.25 cents on the day.

Crude factor

Soybeans, too benefited, gaining some support too from news of a 116,000-tonne order of US beans to an unknown destination, presumed to be China.

The threat of frost in Heilongjiang, China's biggest soybean-growing province, has raised thoughts that the needs of the world's biggest importer of the crop may get even greater.

However, oilseeds suffered particularly from lower crude prices.

"Crude trading below $70 has kept the oilseed market under pressure all day also with a record [US] soybean harvest just round the corner prices remain pressured," a Glencore report said.

Soybeans stood 1.25 cents lower at $9.20 ¾ a bushel, if well above a low earlier of $9.02 a bushel.

'Quiet' wheat

In Europe, rival rapeseed did better, closing up E0.25 a tonne at E255.75 a tonne, E3 above its day low.

Wheats were a mixed bunch. Paris milling wheat for November ended E1.00 higher at E122.00 a tonne, but London wheat for the same month lost £0.25 to £97.00 a tonne.

"Wheat futures have been quiet most of the day with the stronger pound just easing prices down," Glencore added.

Mixed bag

Softs were a mixed bunch too. Cocoa lost some of its mojo, hurt in part by sterling's revival, ending £8 lower at £2,027 a tonne in London for December delivery.

New York's December contract stood down $25 at $3,145 a tonne, having touched a fresh 14-month high earlier of $3,219 a tonne.

The crop continues to trade against a background of a fourth successive year of production falling behind demand.

Sugar blew hot and cold too, despite by a forecast from the Russian Sugar Producers' Union that the country's imports of raw sugar could rise by 2m tonnes next year.

Reports also said that Mexico, which faces a sugar shortage after a poor domestic crop will tender for 343,000 tonnes of sugar on September 30.

London white sugar for December ended up $5.60 at $548.80 a tonne.

But New York sugar October was 2.4% lower at 21.63 cents a pound.

By Agrimoney.com

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