(AgriMoney) – Will Tuesday be a turnaround one in Chicago? One that reverses a strong trend of the previous session, meaning gains this time?
Well, there was some recovery in early deals, despite conditions which a number of markets were finding sticky, if not treacherous, as weak German business sentiment data on Monday, continued to stoke eurozone concerns.
Shares were mixed in Asia, gaining 0.6% in Japan but falling 0.2% in Shanghai and 0.3% in Sydney.
The safe haven of the dollaredging 0.1% higher, not so promising for dollar-denominated exports, such as many agricultural commodities.
Improving condition
Nonetheless, soybeans managed some headway in Chicago, appearing to feed on some of the more positive sentiment around at the close of the last session.
Analysts late on Monday pointed to factors such as the sell-down of funds’ net long positions and the ease of harvest pressure ahead as reasons for investors to put a negative stance under review.
In fact, the US soybean harvest is continuing apace, with data overnight showing 22% of soybeans in the silo as of Sunday, up 12 points in a week, and a little ahead of market expectations.
Signally, the condition of the soybean crop improved too, against what might be expected at this time of year, reaching an 11-week high of 35% rated in “good” or “excellent” condition.
That gave support to ideas that the final harvest yield might beat the, low, expectations around early in the month.
And fears over dryness slowing Brazil’s sowings, for the soybean crop to be harvested early in 2013, appear to be subsiding for now.
‘Talk of end-user pricing’
Still, there are rumours of lower prices spurring demand,
Kim Rugel at Benson Quinn Commodities noted “talk of end-user pricing, with the European Union looking for soymeal and China purportedly buying four-to-five cargos of US soybeans“.
Furthermore, technically, the “market is becoming short-term oversold”, she added.
Chicago’s November soybean contract added 0.5% to $16.17 ½ a bushel as of 09:15 UK time (03:15 Chicago time), with soymeal itself adding 0.9% to $488.50 a short ton, amid ideas that prices below $500 a short ton may be stoking orders from livestock feeders.
Not that the whole oilseeds complex found support, with soyoil for December dropping 0.3% to 54.01 cents a pound.
The vegetable oil felt pressure from the last session’s collapse Kuala Lumpur palm oil, which itself managed to overcome fresh losses to recover to 2,654 ringgit a tonne, a gain of 0.3%, for December delivery, boosted by cargo surveyor data showing rising Malaysian exports.
‘Improvement in moisture conditions’
Grains managed some headway too, with corn for December in adding 0.2% to $7.46 ¼ a bushel.
US Department of Agriculture crop progress data showed the harvest lagging behind market expectations, with 39% complete as of Sunday compared with the 41% the market had expected,
Wheat, its harvest now past so freed from harvest pressure, rediscovered a trace of its mojo of late last week, when ideas of Russian export curbs boosted prices.
But gains were muted, with weather turning damper in the US hard red winter wheat area, which needs moisture for sowings.
“Continued improvement in moisture conditions in the US southern Plains will tend to keep pressure on wheat futures despite ongoing stress on planting conditions in the Black Sea region and in harvest prospects for Australia,” broker Doane said.
‘Heightened concerns’
In fact, in Australia too, rain is looking less scarce, although the weather has offset its greater generosity in that department by bringing some low temperatures t00.
“Local crop concerns remain heightened, particularly given heavy frosts throughout much of New South Wales,” Luke Mathews at Commonwealth Bank of Australia said.
“However, forecast rain later this week has the potential to support production potentials.”
Wheat for December rose by 0.3% to $8.94 ¾ a bushel.
Data later
Soft commodities too had a brightish start, with cotton looking for its first rise in four sessions, amid ideas that prices may be low enough to spark mill buying.
New York cotton for December added 0.4% to 72.82 cents a pound.
Raw sugar, which has already put on a rebound, gained 0.5% to 19.60 cents a pound, although data later from Unica, the Brazilian cane industry group, on harvest progress has the potential to upset the market.
“Another strong crush result is expected and we believe this is likely to weigh on prices,” Mr Mathews said.
Still, with rain now dogging the US cane harvest, some investors may discount the data.
