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Evening markets: US export sales data lift cotton, hurt wheat

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Cotton futures led grains heading into the final turn, helped by much-improved US export data – which was not what the likes of wheat could boast, although soy had a separate demand boast.

 

Cotton futures for March stood up 1.2% at 66.84 cents a pound in late deals in New York, not far below what would be their highest finish in four months.

 

The gains were attributed in part to a recovery in hopes for a trade deal between China, a huge cotton importer, and the US, the top exporter (and a big buyer of Chinese textiles usually too).

 

US Commerce Secretary Wilbur Ross told Fox Business Network on Friday that there was a very high probability of final agreement on a phase one trade deal, saying that “we’re down to the last details now”.

 

‘Supportive to bullish’

However, also in China’s favour was hard evidence of demand for US cotton anyway, with the US Department of Agriculture reporting 345,100 running bales of upland cotton sold last week, and 11,900 running bales on top.

 

For upland cotton, this was the best result in nearly six months, and actually included 83,300 running bales of Chinese purchases.

 

“The US is 63% committed and 17% shipped versus the USDA projection” for 16.5m bales in US cotton exports for 2019-20, which still has more than eight months to run, Louis Rose at Rose Commodity Group noted.

 

“Sales were well ahead of the average weekly pace required to meet the USDA’s… export projection,” he said, terming the data “supportive to bullish”.

 

Grain data

However, for wheat, the US export sales last week of 238,600 tonnes were poor, the second lowest of 2019-20 so far, meeting the low end of the range of market expectations, but less than half the top end.

 

Chicago soft red winter wheat futures for December stood down 0.8% in late deals, at $5.03 ½ a bushel, dropping below their 40-day moving average for the first time since September.

 

Nor were US corn export sales last week humungous, at 581,600 tonnes, termed “middling” by Benson Quinn Commodities, although at least at an eight-week high.

 

Actual shipments were actually at a 2019-20 top, of 602,200 tonnes, although still not strong by historical standards.

 

Corn for December stood down 1.1% at $3.71 ¾ a bushel.

 

‘Blows away the trade range’

Soybean export sales last week, of 1.25m tonnes, weren’t too bad, towards the top end of the range of 800,000-1.40m tonnes.

 

That said, they were down some 550,000 tonnes week on week, and not accompanied by a USDA announcement through its daily alerts system of further sales, which could be viewed as something of a disappointment given talk earlier this week of Chinese interest.

 

Turning to the US itself, and domestic demand, data from industry group Nopa showed a bumper crush in October, of 175.397m bushels of the oilseed – some 8.6m bushels above market expectations, and a record high.

 

It was a figure that “blows away the trade range” said Terry Reilly at Futures International, with investors having expected at best 173.0m bushels.

 

Soyoil struggles

Still, gains in soybean futures were relatively modest, with the Chicago January contract up 0.4% at $9.20 ¾ a bushel, although this was enough to take the lot back above its 200-day moving average.

 

Although soymeal futures gained 1.3% to $306.90 a short ton - helped by strong US export sales data for last week, of 345,320 tonnes, a 2019 high – soyoil, which has been more influential of late, was by 0.8% in late deals to 30.54 cents a pound.

 

The Nopa data showed US soyoil stocks at the end of October of 1.432bn pounds, 3m pounds above market expectations, although as Mr Reilly said, that looked “low relative to the high crush” for the month.

 

Palm down

More certainly undermining was a weak close earlier by palm oil, which ended down 1.3% at 2,571 ringgit a tonne, retreating a little further from last week’s two-year highs.

 

Cargo surveyor data showed a tail-off in Malaysian palm oil exports, with Amspec seeing a fall of 2.5% month on month as of Friday, compared with an increase of 12.3% as of November 10.

 

ITS did see a rise as of November 15, but of 2.2%, well below the 19.7% pace seen five days before.

 

SGS had month on month growth decelerating to 2.8%, from 13.3% as of November 10.

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