(Agrimoney) – Corn prices fell on Tuesday, as concerns mount around ample global supplies, while bargain buying lifted soybeans, and sugar fell back.
A corn shipment is reported to be heading to the US from Brazil.
Although one cargo will do little to increase stocks, it bodes poorly a time when exports are what is needed for US prices.
The shipment provides more evidence that US product is overpriced by world standards, thanks in part to the very weak position of the Brazilian real against the dollar.
Booming exports
Brazilian corn exports have been booming.
A report from the Brazilian Foreign Trade Office showed daily corn shipments in the first three weeks of October at 266,200 tonnes, compared to daily volumes of 164,500 tonnes in the previous month, and 138,200 tonnes in October 2014.
And the coming harvest is likely to bring yet more ample supplies.
Analyst Dr Michael Cordonnier kept his forecast for Brazilian corn production unchanged at 81.2m tonnes.
Rains are easing dryness fears in row crop regions of Brazil.
“Dryness is currently widespread across northern and central Brazil, but significant improvements are expected over the next ten days,” said Kyle Tapley of MDA Weather services.
Argentine elections
Dr Cordonnier forecast Argentine corn production at 21.6m tonnes.
But he did note that that Presidential elections, which failed to produce a winner in the first round of voting, could alter farmer intentions.
Mr Cordonnier has previously said that a victory by the liberalising candidate Mauricio Macri could trigger higher corn sowings, thanks to a lifting of export restrictions.
South African drought
But there was some bullish news from South Arica, as further evidence emerged on the effects of drought on that country’s corn prospects.
Farmers intend to plant just 2.55m hectares corn next season the lowest sowings since 2011, South Africa’s Crop Estimate Committee CEC said.
This would be a fall of 2.65m hectares from 2015 sowings.
“The decrease can be attributed to drought conditions in the most important planting areas,” CEC’s Marda Scheepers said.
December corn closed down 1.3% at $3.80 bushels a tonne.
Eye on Argentina
Soybeans rose as traders unwound long corn and short soybean positions.
Soybeans also got a boost from dry weather in Argentina, as well as a spate of bargain buying after Monday’s losses.
Dr Cordonnier cut his forecast for Argentine soybean production by 2m tonnes to 58m tonnes.
MDA weather Services forecast rains in Argentina on Wednesday and Thursday, but warned that dry weather would linger in the Buenos Aires region.
‘Bouncing bear market’
In Chicago, the first notice day for November soybean futures comes at the end of this week.
CHS Hedging noted that there had been “slow news,” but added that a “bounce in a bear market is not unusual”.
November soybean futures rose 0.7% to $8.91 ¼ a bushel.
January soybeans rose 0.7% to $8.91 a bushel.
‘Not a great barometer’
Wheat got a boost from the first condition rating of the US season.
Winter sown wheat, which makes up most of the US crop, was rated at 47% good or excellent compared to 59% last year, and 50% average.
Markets had been looking for an initial 55% good or excellent.
Winter wheat was seen 83% planted versus 85% on with 62% emerged, in line with the average.
Corn pressures prices
But CHS Weather Services noted that “early ratings are usually not a great barometer of final yields”.
And pressure from the falling corn market choked off an early rally.
December Chicago wheat edged up 0.3% at $5.09 ¼ a bushel.
But December Kansas wheat was down 1.2% at $4.86 ¼ a bushel.
Rain misses Minas Gerais
Arabica futures held steady. Although Brazil is enjoying rains, they are falling short of what is needed in some key growing regions, particularly the northern part of Minas Gerais, the largest coffee-growing state.
December arabica coffee in New York went sideways, at 117.3 a pound.
January robusta coffee in London settled up 0.4%, at $1,559 a tonne.
Little fresh news
Sugar fell back, after a strong day’s trading on Monday.
“There was little fresh fundamental news,” noted Nick Penney, of Sucden Financial.
Mr Penney noted “the lack of bids for nearby physical sugars in Brazil”.
“This may eventually cap further advances if the appetite from the speculative community were to diminish”.
New York March raw sugar futures settled down 1.5%, at 14.42 cents a pound.
