(Agrimoney) – Wheat prices slumped as further evidence emerged of the cheapness of global supplies on Thursday, while sugar soared by nearly 6%.
A stronger macroeconomic picture did little to support wheat prices, and markets once against focused on a glutted market, with US prices uncomfortably high against global levesl.
“Eroding ag markets today despite outside market rebound reflects adequate US/global grain/oilseed supplies, approaching US harvest, steadily eroding global wheat values and managed fund reluctance to re-engage longs until macros stabilize,” noted Richard Feltes of RJ O’Brien.
Egyptian tender
In a tender by the Egyptian state grain buyer Gasc held on Thursday, French wheat was offered down to just $174.74 a tonne, a full $11 a tonne cheaper than offers made on Friday last week.
And even at that knockdown price, French product could not compete with Russian wheat, which was offered at a slightly higher price but offers more competitive freight rates between the Black Sea and Egyptian ports.
The Baltic news agency BNS on Thursday announced that Lithuanian was headed for a record grain harvest of 5.9m tonnes, up 11% from last year.
In Paris, Matiff December wheat fell 1.5% to close at at E166.50 a tonne.
Canadian pressure
And there was further pressure from Canada, where the government reported stocks July stocks at 7.11m tonnes, 2.3m tonnes higher than the US Department of Agriculture’s estimates, and below trade expectations.
In Minneapolis, December spring wheat closed down 1.6% at $5.00 a bushel.
Weekly US export sales data rounded out a gloomy picture for wheat, with sales reported at 277,500 a tonne, at the lower end of trade estimates.
December Chicago wheat closed down 3.0% at $4.65 ¼ a bushel, a new contract low.
Disappointing sales
Export sales data also weighed on corn.
Old crop corn sales were 112,700 tonnes, were expectations had been for no sales, but new crop sales were disappointing at 328,300 tonnes, compared to expectations of 500,000 to 700,000 tonnes.
And analysis group Informa raised its forecast for US corn production.
Informa raised its expectations for US 2015 corn yields to 168.8 bushels an acre, up from the 165.4 bushels an acre forecast earlier.
December corn fell 1.6% to close at $3.61 ½ a bushel.
Soybeans sales surprise
Informa also raised its forecast for soybean yields to 47.0 bushels an acre, up from the 45.4 bushels an acre forecast last week.
But news on export sales was encourage for soybeans, and helped to limit losses, as old crop soybeans saw cancellations of 60,500 tonnes, where trade had expected cancellations of up to 150,000 tonnes.
“This week’s old crop sales were negative but that is not a huge surprise at the end of the year,” noted Joe Lardy of CHS Hedging.
“Even with the cancellations, old crop total commitments are at 101.8% of the USDA export figure,” he added.
And new crop soybean sales were 1.5328m tonnes, were trade had expected sales of 700,000 to 900,000 tonnes.
In addition, the USDA also announced 880,000 tonnes of new crop soybeans sales in daily announcements.
November soybeans closed down 0.6% at $8.79 ¾ a bushel.
‘No chance’ for sorghum
Joe Lardy noted that with negative export sales today, there is now “no chance” that sorghum exports will reach the US Department of Agriculture’s export forecasts for this marketing year, which finished at the end of August.
And canola prices were hit by larger than expected Canadian stocks.
Canada’s canola stocks were seen at 2.322m tonnes in July, compared to market expectations of 1.0 to 1.7m tonnes, and well behind the International Grains Council estimate of 1.1m tonne.
November canola fell 1.7% to finish at Can$457.70 tonnes a bushel.
Thai overhang easing?
But there was better news in softs, as raw sugar soared to its highest level since July.
Sugar prices were supported by rain delays to the all-important Brazilian centre south cane harvest.
Prices also got a boost from data showing a sharp rise in Thai sugar exports to China.
The surge has eased concerns about an overhang of Thai sugar, which has been pressuring the front month October 2015 sugar contract.
October raw sugar settled up 5.7%, at 11.34 cents per pound, in very heavy trading.
This is the strongest one day rally in the front month raw sugar contract in over a year.
Brazil drought
Coffee futures rallied from contract lows, helped by fears of unfavourable weather in key regions.
Jack Scoville of Price Futures said “Brazil has had drought in some areas, it has been dry in Central America and also in parts of Southeast Asia”.
“The ideas of lower production suggest that the down trend might finally be coming to an end,” he added.
December arabica coffee futures settled up 1.0%, at 119.55 cents a pound in New York, while in London November robusta coffee settled up 0.6%, at $1,590 a tonne.
