in that month in 1907, 1929 and 1987.)
It brought a mini-surprise on Thursday to grain markets, when they closed higher for a second successive day against the run of play of late, undermined by expectations of huge US harvests and ample world supplies.
“We are doubtful that markets have bottomed as yet,” said Richard Feltes at Chicago broker RJ O’Brien, speaking for many.
The consensus idea is that pressure from the US harvest will not allow corn and soybean prices especially to bottom out until probably next month, as combines get returned to the barn.
Off message
But futures refused to stick to the script, despite the upbeat estimates overnight by FCStone for US corn and soybean production.
The broker pegged corn output at 14.958bn bushels, on a yield of 178.4 bushels per acre, compared with US Department of Agriculture estimates of 14.395bn bushels and 171.7 bushels per acre.
The soybean harvest was seen at 4.066bn bushels, on a yield of 48.4 bushels per acre. The USDA has 3.913bn bushels and 46.6 bushels per acre.
And estimates from Informa Economics are due tomorrow, and expected to be strong too, if not as strong as FCStone’s.
‘Weather leans positive’
But just as investors, during grain price rallies, say that “bulls need feeding” – ie that fresh upbeat news is needed to keep values supported – it currently looks like it is bearish talk of huge US yields which the market is tiring of. For now, at least.
Besides, the harvest talk is not quite as positive as it was.
“Yields have fallen from the Paul Bunyan yields in the Delta as harvest moved into Iowa, Nebraska, and Minnesota,” US Commodities said, referring to a legendary North American giant.
And the harvest itself looks like slowing, thanks to rains.
“Weather leans positive” for prices, Mr Feltes said, flagging the “appearance of a light Midwest rain system next Monday, Saturday morning frost in North Dakota, and locally heavy overnight rain from central Missouri to central Illinois”.
For Brazil, forecasts show a “reversion to a warm and dry last-half-of October pattern across the north west” posing a little threat to the ideas for a huge harvest, and upbeat export hopes too, as highlighted by a USDA report overnight.
‘Rather disappointing’
Weekly US export sales data, it has to be said, were a little less supportive, at 869,000 tonnes for soybeans, within expectations but not better, and 638,000 tonnes, for 2014-15, for corn, below market forecasts.
“Soybean sales were rather disappointing, falling under 1.0m tonnes,” said Benson Quinn Commodities.
“Corn sales were disappointing but are on pace to reach the USDA’s export forecast” for 2014-15.
Still, soybean futures for November gained 0.9% to $9.24 ½ a bushel, while December corn gained 0.5% to $3.22 ¾ a bushel.
Above forecasts
For wheat, US export sales last week were for once “above the high end of expectations”, Benson Quinn Commodities noted, coming in at 741,000 tonnes, above ideas of at best 600,000 tonnes, and the best figure for two months.
“All three US markets are higher because of this,” Terry Reilly at Futures International said, also noting fresh hope for global wheat demand “after Iran bought a large amount of EU wheat”.
Besides, hedge funds have a record net short in Chicago wheat, a factor which may encourage them to close some and take profits, especially with shares falling again.
Stockmarket drops in the last session were viewed as encouraging some cash back into commodities.
Wheat for December closed up 0.8% at $4.82 ¾ a bushel in Chicago, although Paris wheat did significantly better, adding 2.1% to E158.00 a tonne for November delivery.
And London feed wheat added 2.1% to £113.00 a tonne, putting behind it, for now, the ideas of sub-£100-a-tonne prices.
Coffee vs cocoa
Still, arabica coffee was the star performer among ags, ending up 4.1% at $208.60 a tonne in New York for December delivery, lifted by growing concerns over fresh Brazilian dryness, as discussed elsewhere on Agrimoney.com.
But cocoa steered again in the opposite direction, shedding 2.6% to $3,090 a tonne in new York for December delivery, a fourth successive lower close. London cocoa dropped 1.5% to £1,969 a tonne.
The losses followed an announcement by Ghana of a 53% jump to 5,520 cedis ($1,720) per tonne in the price paid to growers for the newly started 2014-15 season.
The price is also a touch higher than that that offered by neighbouring Ivory Coast, the top producing country.
(The gap between payment levels in 2013-14 is believed to have fuelled a wave of smuggling from Ghana to Ivory Coast.)
Whatever, higher guaranteed prices speak of an increased incentive to farmers to raise production.
