Ag futures traded weaker to start the week.
But they ended up well above early lows, with the Bcom ag subindex down only 0.1% in late seals, having traded down 1.0% earlier.
The recovery was not universal, coming somewhat later in the day, too late, for instance, to prevent Kuala Lumpur palm oil for August ending down 1.7% at 1,994 ringgit a tonne, ending below 2,000 ringgit a tonne for only the third time in 2019 on a benchmark contract basis.
Prices were little helped by data earlier from cargo surveyor ITS showing Malaysian palm exports for the first 10 days of June down 31% month on month, with AmSpec Agri putting the drop at 32%.
Back below 100
Nor could it, even in later trade, stop New York arabica coffee for July ending down 2.3% at 98.60 cents a pound, back below its 100-day moving average, as well as the psychologically important 100-cents a pound mark.
The decline was attributed at least in part to the extent of short-closing – record in fact- in the week to last Tuesday as shown up in Commodity Futures Trading Commission data released late on Friday.
Such a shift can be seen as potentially creating extra scope for fresh short bets.
That said, producer selling appears to remain popular too, with the gross producer-merchant-processor short in arabica coffee futures and options at its highest since November 2016.
Still, Chicago corn futures for July, having stood in negative territory for most of the day, crawled back to close unchanged at $4.16 a bushel.
Soybean futures for July ended up 0.3% at $8.58 ½ a bushel, having earlier bounced off their 20-day moving average, at $8.48 ¼ a bushel.
And soft red winter wheat fared best of all among Chicago’s big three, recovering from 1.2% losses at one stage to close up 0.6% at $5.07 ½ a bushel for July.
The recoveries were seen down at least in part, again, to fund moves, and retreats ahead of a huge extent of uncertainty coming up in the next 24 hours.
Besides the usual unknown of the weather outlooks, in particular in the US, and how their alterations might affect the progress of US spring sowings, and winter grain harvesting, there are US Department of Agriculture data due later on crop progress for the week to Sunday.
This will include, besides for example the latest much-watched corn and soybean planting progress numbers, the first full US data of this year on corn condition, and on US winter wheat harvest completion.
Meanwhile, Tuesday brings the monthly USDA Wasde briefing, which is expected to make some adjustment at least to the US 2019 corn harvest forecast to account for the slow US sowings season.
‘Tremendous amount of unknowns’
Richard Feltes at RJ O’Brien said that he “would be surprised if USDA cuts corn acres more than 5m acres and yield more than 5 bushels per acre”.
However, some forecasters see a yield cut of 7 bushels per acre, for instance, and others none at all.
With such uncertainty around, Tregg Cronin at Agrivisor sai that market was seeing “more traders move to the sidelines ahead of tomorrow’s Wasde report.
“There is a tremendous amount of unknowns heading into this release for production, demand, and even the possibility of acres being adjusted.”
And with funds having turned net long in corn, while remaining net short in soybeans and wheat, position closing was likely to help soy and wheat over corn.
In fact, the “virtual elimination of managed fund short vulnerability in corn” means it will require “more adverse weather in coming weeks [for futures] to penetrate recent highs”, Mr Feltes said.
‘Not nearly enough damage yet’
He also reminded of the large and extended surplus expected in US soybeans, saying that while the US crop this year was “to a sub-par start” it had sustained “not nearly enough damage done as yet to suggests scarcity in 2019-20”.
And Terry Reilly noted that “no China trades were conducted overnight, from what we heard” in terms of soybean orders, while adding that “last week we heard up to 22 cargos of South American soybeans were sold to China.”
This after some soft Chinese soybean import data for May as released earlier on Monday.
Still, at least US export data showed some pick-up last week, with US shipments as measured by cargo inspections at 714,627 tonnes, above the range of forecasts of at best 650,000 tonnes expected by investors, and up more than 200,000 tonnes week on week too.
For corn, shipments of 850,647 tonnes were also an improvement week on week, of more than 100,000 tonnes, while coming in towards the top of market expectations.
By contrast, wheat exports last week of 64,779 tonnes were down nearly 130,000 tonnes week on week, and towards the bottom end of the range of market expectations.
‘Crop stress to build’
Still, weather offered wheat bulls some support, with Maxar noting that in the Black Sea region, “crop stress will continue to build across eastern Ukraine and central Russia this week as dry and warm conditions continue there.
“Showers are expected in north western Central [Russia] Region this week, but mostly dry weather is expected across the rest of the region.
“Temperatures will also remain well above normal, accelerating drying of soils and increasing stress on late growth of wheat and early growth of corn and sunflowers.”
In the Canadian Prairies too, “moisture will remain short across much of the region this week, maintaining stress on wheat”, Maxar said.