7th Sept 2012, by Agrimoney
Many markets managed to find upward momentum on Friday, underpinned by the European Central Bank's offer of unlimited bond buying to support indebted eurozone countries.
Shares rose more than 2% in Seoul and Tokyo, and by 3.7% in Shanghai, outperforming even the 1.9% rise overnight in Wall Street stocks.
The dollar eased a touch more, near to its weakest levels since May, a sign of risk appetite, which also provided an extra boost to values of dollar-denominated exports, such as many commodities, making them more affordable to buyers in other currencies.
'Provided much relief'
And many commodities got off to a positive start, including crude, London copper and New York raw sugar, which for October delivery staged a bounce from a two-year closing low to stand at 19.17 cents a pound at 09:15 UK time (04:15 New York Time, 03:15 Chicago time), a gain of 1.6% on the day.
OK, the case for support from India's weak monsoon has taken a bit of a knock.
"India's monsoon rains remain 10% short of average, but last week's 6%-above-average rains provided much relief to the cane crops," Lynette Tan at Phillip Futures said.
But it will be tempting for the growing band of investors with short positions to take profits, after a fall of more than 20% since July 20.
Data later
But grains did not match them, as the uncertainty encouraged by the prospect of a slew of data encouraged profit-taking in Chicago too, by investors who have built up substantial long positions.
Friday brings a set, in Statistics Canada data on grain inventories, Informa Economics forecasts for US crop yields and production, and weekly US export sales data, expected by Benson Quinn Commodities to "offer direction" to the market later.
Soybean export sales are expected to remain healthy, at 700,000-900,000 tonnes, in line with the 721,000 tonnes last time.
Wheat shipments are expected to match the 509,000 tonnes last time too, to reach 450,000-650,000 tonnes.
For corn, sales are expected to come in at 200,000-350,000 tonnes, above the 135,000 tonnes the previous week, but still soft in historic terms, reflecting the rationing being done by high prices to match demand to drought-weakened supplies.
Priced in?
But the main course of statistics follows on Monday, when the US Department of Agriculture unveils its latest Wasde crop report including, in particular, upgraded forecasts for domestic corn and soybean yields, which has given bulls particular cause for thought.
OK, the USDA is widely expected to cut its corn harvest estimate further, but how much potential does this have for raising prices?
"Most private guesses for corn production are lower than the last USDA numbers, but everyone already knows that," Mike Mawdsley at Market 1 said.
And, for soybeans, there is an increasing idea, fuelled by FCStone estimates on Wednesday, that the USDA may even increase its yield figure, after the rains which have refreshed many Midwest areas, sparking a sharp recovery in the condition of the crop in Illinois, the second-ranked US producing state.
Soybeans vs rapeseed
As an extra negative for soybeans, China's CNGOIC think tank gave an indication of demand rationing occurring in the world's top importing country of the oilseed, showing some users switching to rapeseed instead.
China's rapeseed imports for the October-to-December period will jump 86%, if still to a relatively modest (compared with soybean trade) 1.1m tonnes, the CNGOIC said.
Imports in the first seven months of 2011 reached 1.75m tonnes, mostly from Canada, of the canola variant. And, indeed, talk of further Chinese purchases helped Winnipeg's November canola lot hit a contract high of Can$646.70 a tonne on Wednesday.
The lot stood at Can$638.00 a tonne in early deals on Friday, weighed by Chicago's November soybean lot, which dropped 0.8% to $17.33 ¾ a bushel.
Still, within the oilseeds complex, it was palm oil which fared worse, dropping 1.6% to 2,902 ringgit a tonne in Kuala Lumpur, following a bearish outlook on Thursday from Dorab Mistry, the respected palm analyst.
The vegetable oil also faced key data on Monday, with monthly Malaysian crop data, expected to show the country's inventories at a nine-month high above 2m tonnes.
'Boosted farmers' sowing plans'
For grains, there was some price-negative talk to factor in for corn, after the Buenos Aires grains exchange lifted to 3.4m hectares, from 3.1m hectares, its forecast for Argentine sowings of the crop.
"Several factors have had a positive impact and boosted farmers' sowing plans," Esteban Copati, grains exchange analyst, said.
However, this was countered by continuing evidence of demand, with South Korea's Major Feedmill Group buying 65,000 tonnes of the grain from the US and South America, and the country's Korea Feed Association tendering for 55,000 tonnes.
This following a US sale of 217,424 tonnes of corn to "unknown" unveiled on Thursday.
Chicago corn for December eased 0.1% to $7.97 ½ a bushel.
'Excess of water'
For wheat, investors succumbed to the temptation to take some profits on the last session's rally, which was sparked by rising Black Sea prices, despite further setbacks to southern hemisphere crops.
Rabobank downgraded its estimate for the Australian crop, while the Buenos Aires grains exchange said that the rains which have moistened seed beds for corn may have gone too far in watering already-sown wheat.
"Rains recorded in the last few days have exacerbated the excess of water in extensive areas of Buenos Aires," the exchange said.
"Although it's too early to calculate losses, the area worst affected by the floods is central Buenos Aires where plantings are relatively inferior compared with the rest of the province."
Chicago's December contract dropped 0.2% to $8.90 a bushel.
Many markets managed to find upward momentum on Friday, underpinned by the European Central Bank's offer of unlimited bond buying to support indebted eurozone countries.
Shares rose more than 2% in Seoul and Tokyo, and by 3.7% in Shanghai, outperforming even the 1.9% rise overnight in Wall Street stocks.
The dollar eased a touch more, near to its weakest levels since May, a sign of risk appetite, which also provided an extra boost to values of dollar-denominated exports, such as many commodities, making them more affordable to buyers in other currencies.
'Provided much relief'
And many commodities got off to a positive start, including crude, London copper and New York raw sugar, which for October delivery staged a bounce from a two-year closing low to stand at 19.17 cents a pound at 09:15 UK time (04:15 New York Time, 03:15 Chicago time), a gain of 1.6% on the day.
OK, the case for support from India's weak monsoon has taken a bit of a knock.
"India's monsoon rains remain 10% short of average, but last week's 6%-above-average rains provided much relief to the cane crops," Lynette Tan at Phillip Futures said.
But it will be tempting for the growing band of investors with short positions to take profits, after a fall of more than 20% since July 20.
Data later
But grains did not match them, as the uncertainty encouraged by the prospect of a slew of data encouraged profit-taking in Chicago too, by investors who have built up substantial long positions.
Friday brings a set, in Statistics Canada data on grain inventories, Informa Economics forecasts for US crop yields and production, and weekly US export sales data, expected by Benson Quinn Commodities to "offer direction" to the market later.
Soybean export sales are expected to remain healthy, at 700,000-900,000 tonnes, in line with the 721,000 tonnes last time.
Wheat shipments are expected to match the 509,000 tonnes last time too, to reach 450,000-650,000 tonnes.
For corn, sales are expected to come in at 200,000-350,000 tonnes, above the 135,000 tonnes the previous week, but still soft in historic terms, reflecting the rationing being done by high prices to match demand to drought-weakened supplies.
Priced in?
But the main course of statistics follows on Monday, when the US Department of Agriculture unveils its latest Wasde crop report including, in particular, upgraded forecasts for domestic corn and soybean yields, which has given bulls particular cause for thought.
OK, the USDA is widely expected to cut its corn harvest estimate further, but how much potential does this have for raising prices?
"Most private guesses for corn production are lower than the last USDA numbers, but everyone already knows that," Mike Mawdsley at Market 1 said.
And, for soybeans, there is an increasing idea, fuelled by FCStone estimates on Wednesday, that the USDA may even increase its yield figure, after the rains which have refreshed many Midwest areas, sparking a sharp recovery in the condition of the crop in Illinois, the second-ranked US producing state.
Soybeans vs rapeseed
As an extra negative for soybeans, China's CNGOIC think tank gave an indication of demand rationing occurring in the world's top importing country of the oilseed, showing some users switching to rapeseed instead.
China's rapeseed imports for the October-to-December period will jump 86%, if still to a relatively modest (compared with soybean trade) 1.1m tonnes, the CNGOIC said.
Imports in the first seven months of 2011 reached 1.75m tonnes, mostly from Canada, of the canola variant. And, indeed, talk of further Chinese purchases helped Winnipeg's November canola lot hit a contract high of Can$646.70 a tonne on Wednesday.
The lot stood at Can$638.00 a tonne in early deals on Friday, weighed by Chicago's November soybean lot, which dropped 0.8% to $17.33 ¾ a bushel.
Still, within the oilseeds complex, it was palm oil which fared worse, dropping 1.6% to 2,902 ringgit a tonne in Kuala Lumpur, following a bearish outlook on Thursday from Dorab Mistry, the respected palm analyst.
The vegetable oil also faced key data on Monday, with monthly Malaysian crop data, expected to show the country's inventories at a nine-month high above 2m tonnes.
'Boosted farmers' sowing plans'
For grains, there was some price-negative talk to factor in for corn, after the Buenos Aires grains exchange lifted to 3.4m hectares, from 3.1m hectares, its forecast for Argentine sowings of the crop.
"Several factors have had a positive impact and boosted farmers' sowing plans," Esteban Copati, grains exchange analyst, said.
However, this was countered by continuing evidence of demand, with South Korea's Major Feedmill Group buying 65,000 tonnes of the grain from the US and South America, and the country's Korea Feed Association tendering for 55,000 tonnes.
This following a US sale of 217,424 tonnes of corn to "unknown" unveiled on Thursday.
Chicago corn for December eased 0.1% to $7.97 ½ a bushel.
'Excess of water'
For wheat, investors succumbed to the temptation to take some profits on the last session's rally, which was sparked by rising Black Sea prices, despite further setbacks to southern hemisphere crops.
Rabobank downgraded its estimate for the Australian crop, while the Buenos Aires grains exchange said that the rains which have moistened seed beds for corn may have gone too far in watering already-sown wheat.
"Rains recorded in the last few days have exacerbated the excess of water in extensive areas of Buenos Aires," the exchange said.
"Although it's too early to calculate losses, the area worst affected by the floods is central Buenos Aires where plantings are relatively inferior compared with the rest of the province."
Chicago's December contract dropped 0.2% to $8.90 a bushel.
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