(Agrimoney) – Soybeans again set the pace in Chicago, lifted by concerns over Brazil’s truckers’ strike, while grains showed behaviour perhaps more expected for the last trading day of the month.
Month ends are typically associated with fund selling, to withdraw cash for paying off clients, while month beginnings are often viewed as inspiring inflows of money.
But could funds be taking profits this time, meaning closing some of their stack of short positions, and putting upward pressure on prices?
Soybean investors found reason to take prices higher, although as truckers continued to man roadblocks in parts of Brazil, albeit with government concessions having apparently reduced the scale of the protests.
“As soon as the local police manage to open one stretch of highway, protestors block another stretch,” crop analyst Michael Cordonnier said.
“President Dilma Rousseff and federal officials are scrambling to resolve the situation, but a lack of organised leadership among the protestors makes it difficult to know who is in charge or who to negotiate with.”
‘Getting a little nervous’
“Concessions have been made by the Brazilian government which some but not all of the trucker groups have accepted,” one US broker said.
“There is still a lot of uncertainty to the resolution of this strike and the soybean shorts may be getting a little nervous.”
Brian Henry at Benson Quinn Commodities said: “The South American trucker strike remains the main talking point.
“The majority are in agreement that the worst is behind us, but there continues to be opinions regarding the degree of damage already inflicted and the potential for residual strikes.”
Contract expiry
Certainly, amid ideas that Brazil’s logistical disruptions will divert importers to the US, Chicago soybeans for May added a further 0.8% to $10.34 ¾ a bushel as of 08:45 Uk time (02:45 Chicago time), taking gains for the month nearly to 7%.
Soymeal – strengthened on ideas that Brazilian processing plants, starved of soybeans, will be unable to make the feed ingredient – for May rose by 0.5% to $345.90 a short ton, also up by nearly 7% over February.
It was a help that Chinese trade data showed a 16.2% year-on-year rise to 6.88m tonnes in the country’s soybean imports last month, of which 6.64m tonnes came from the US, a jump of 23%.
Also, there were no deliveries against the expiring March soybean lot, for which today is first notice day, bringing the start of the expiry process, and giving contracts power over physical crop.
Corn deliveries
There were, however, some deliveries against corn futures, suggesting that Chicago is a somewhat appealing place for sellers of physical crop.
A total of 1,416 contracts were delivered, at the top end of market expectations.
Chinese import data were not so encouraging either, with volumes down 11.0% to 579,393 tonnes last month.
Imports of corn-derived distillers’ grains were down too, by 88% to 67,475 tonnes.
Still, besides support from soybeans, whose prices are linked by the crop being bitter competitors in the forthcoming battle for acres, corn also received help from a firm start to energy markets, with Brent crude up some 2%, back above $61 a barrel.
Corn, a major use of which in the US is in making bioethanol, stood 0.2% higher at $3.89 ¼ a bushel.
Wheat gains
Even wheat managed gains too, although hard red winter wheat was reluctant after receiving a handful of deliveries, 79, against the expiring March contract.
Kansas City-traded hard red winter wheat added 0.2% to $5.33 ¾ a bushel.
Chicago soft red winter wheat gained 0.4% to $5.02 ½ a bushel, cheered by its performance in the last session, when a dip below $5.00 a bushel inspired a round of bargain hunting.
Chinese wheat imports were not so encouraging for bulls, down 90% year on year at 73,879 tonnes last month.
Palm up
Short covering appeared in evidence in Kuala Lumpur too, where palm oil gained 1.6% to 2,312 ringgit a tonne, amid talk of position closing ahead of a key conference next week.
Firmer crude is a positive too for the vegetable oil, used largely in making biodiesel.
