(Agrimoney) – The bargain hunting noted at the end of the last session in grains gathered momentum in this one.
Headway was a bit of a theme in shares too, with Tokyo stocks gaining 1.9%, and Shanghai shares 3.5%, while London, Frankfurt and Paris quires were all up more than 1% in early deals.
“Risk off” moved to “risk on”, potentially unsettling some of the holders of short positions in grains who had already experienced some discomfort.
“Wednesday’s price action was a reminder to the spec trade that the soybean market doesn’t always let you sell it and sleep on it,” Benson Quinn Commodities said, highlighting too that in wheat futures have “moved deeper into oversold territory, which merits some attention.
“It feels like the momentum traders are so short they have to keep offering to entice others to sell,” the broker said.
“This could blow up on them regardless of the fundamentals.”
Data later
In fact, fundamentals will loom large on Thursday with another slew of data, although statistics it has to be said not nearly as important as the plethora released on Monday by the US Department of Agriculture.
Thursday will see the USDA release its export sales data for last week, seen for soybeans reaching 700,000-900,000 tonnes, just short of the 910,625 tonnes the week before.
For corn, US export sales last week are pegged at 550,000-750,000 tonnes, implying an improved from the 387,648 tonnes last time.
And for wheat, a rise is expected too, to 250,000-450,000 tonnes from 151,000 tonnes.
More of a glimpse into the world wheat export picture will also be provided by Egypt’s Gasc grain authority, which will release the results of its latest tender, the second already this year, which will give an insight into the competitiveness, and availability, of grain from different origins.
Crush, acres
Meanwhile, the National Oilseed Processers Association will release data on the US crush last month, with an average estimate is for a figure of 166.9m bushels, which would be a record for December, and beat the 161.2m bushels processed in November.
And there will be two reports on US acreage – the first updated Farm Service Agency statistics on US crop area last year (which is likely to be ignored, given that the USDA on Monday published its final estimates, which already took account of today’s FSA figures).
Informa Economics is expected to release fresh estimates on US plantings for the 2015 harvest.
Last month’s estimate for US winter wheat area was 42.278m acres, with corn sowings pegged at 88.01m acres and soybean seedings at 88.78m acres.
Richard Feltes at broker RJ O’Brien forecast that figures for both corn and soybeans “will be notched slightly lower”, after the USDA on Monday trimmed its figures for acres in 2014.
That said, “lower winter wheat area and likely cut in 2015 cotton area will make more acres available for higher yielding, full season soybeans,” Mr Feltes added.
Prices gain
Still, for now grains futures stood in positive territory, also given some help by pauses in the dollar’s appreciation, and in the slide in oil prices.
Wheat for March gained 0.8% to $5.42 a bushel in Chicago as of 09:20 UK time (03:20 Chicago time), also helped by further signs of demand picking up at lower prices.
Besides the Egyptian tender, Algeria announced it was seeking wheat for May, and Libya is in the market too.
Corn for March rebounded 1.1% to $3.85 ¼ a bushel, while March soybeans, now the spot contract, gained 0.5% to $10.13 ¾ a bushel – climbing just back above their 100-day moving average.
Six-month high
Soybeans were helped by renewed firmness in soymeal, which added 0.4% to $336.70 a short ton, helped by signs of bargain hunting by end users.
“There has been better EU and Latin interest in soymeal on the break,” Benson Quinn Commodities said.
And, elsewhere in oilseeds, palm oil helped too by gaining 1.5% to 2,380 ringgit a tonne in Kuala Lumpur – despite data from cargo surveyor Intertek showing Malaysian exports down 13% so far this month, compared with the same period of December.
The rise in palm oil futures, which earlier hit a six-month high of 2,394 ringgit a tonne, was attributed to the revival in crude prices late in the last session.
Energy markets are important to palm oil, as the vegetable oil is a major raw material for biodiesel.
