9th Nov 2012, by Agrimoney
Sure, Friday may yet throw a few bombshells to financial markets. But it entered the world stage on tiptoes.
On the macroeconomic stage, fears for the latest cash injection into Greece – due on Monday - have, temporarily, overtaken the US "fiscal cliff" for importance, with world lenders arguing over how much cash Athens should receive, and who picks up the tab in case of default.
European share markets opened barely changed, while the dollar froze, copper showed small gains, and Brent crude a small loss, of 0.2%, as of 09:10 UK time (03:10 Chicago time).
Volatility was hardly huge on agricultural commodity markets either, although this is ahead of a key report, the US Department of Agriculture's latest Wasde briefing, which could make current dealing something of a calm-before-the-storm period.
Importance of exports
Soybeans were among the most definite crops in their movements, falling 0.3% to $14.91 ¼ a bushel for January delivery.
But then, the weather in South America has taken a turn for the better, in terms of clearing the way for sowings too, enabling a rapid pick-up in the pace of plantings in Argentina, data from the Buenos Aires grains exchange late on Thursday showed.
Furthermore, the Wasde briefing is expected to raise the estimate for the US soybean crop, by some 30m bushels, and potentially the forecast for year-end inventories too.
The idea of higher inventories gained some traction when the USDA on Thursday revealed the lowest weekly soybean export figure since June last year, of some 190,000 tonnes, down from 761,000 tonnes the week before.
"It would appear that robust weekly soy export sales in recent weeks may have supported soy board while absence of strong weekly sales serves as warning that current prices are rationing demand," Richard Feltes at RJ O'Brien said.
'Really surprising'
Indeed, there are growing fears over demand from China, the top importer, too, stoked by details in the export sales report, which reported deals which had been booked to "unknown" switched to the likes of Indonesia, South Korea and Spain, besides China itself.
"This is what I think is really surprising," Kim Rugel at Benson Quinn Commodities said.
"The trade has become conditioned to assume unknown destination equals China," an analysis which on USDA figures would imply that "China has been a very active buyer with other traditional destination still needing coverage".
"My take away from Thursday's switching seems to imply that 'unknown' maybe other destinations, and that China sales are in fact below trades' estimates."
And this is, after all, against a background of poor Chinese soybean crush margins, at a negative $500 a tonne or so.
'Extra low-protein wheat'
The crop which is expected potentially to turn out most bullishly from the Wasde, in terms of estimate revisions, is wheat, with the USDA expected to cut estimates for world supplies to reflect reduced hopes for harvests in Argentina and Australia.
In fact, Australia is getting more of the rain which farmers wanted a couple of months ago, to boost grainfill, but which it now looking more of a threat to quality and harvest progress.
"The current rain event is raising fears that wheat quality may decline," Luke Mathews at Commonwealth Bank of Australia said, if adding that he was "not expecting significant quality issues to surface because of the rain event".
However, already there was a "higher-than-normal quantity of low-protein ASW wheat in northern New South Wales", typically Australia's second-ranked wheat producing state.
'Strong indication'
Furthermore, there are continued concerns over the dryness which is hampering newly-sown US winter wheat for 2013 harvest.
"Weather in the US plains continues to threaten the current winter wheat crop," Lynette Tan at Phillip Futures said, adding that it was "likely that wheat may extend its uptrend to $9.27-a-bushel levels".
Brian Henry at Benson Quinn was upbeat over values too, saying that "one factor to take away from Thursday's trade is the fact that for the first time since basically mid-July sharp increase in open interest on all three wheat markets, on days the market rallied, was not met by heavy selling during the next trading session.
"This is a strong indication of a renewed interest in owning wheat, which is healthy for the market regardless of Friday's price action."
Still, in early deals, Chicago wheat for December was 0.2% lower at $9.00 ½ a bushel.
Export signals
That left corn the best performer, adding 0.2% to $7.42 ½ a bushel, maintaining its unwillingness to stray too far from the $7.50-a-bushel mark.
Phillip Futures' Lynette Tan said: "Going forward, corn markets will likely rely heavily for signals from export demand," which have been mixed, with Thursday's export sales data poor but within the range of expectations.
And while South Korea earlier in the week passed on a tender for the grain, talk was that US offers were only at a premium of $5-10 a tonne to the South American supplies which have been taking the limelight in recent months.
Ethanol production data have been improving too, although there is some doubt over whether that can be sustained given temporary plant shutdowns on the agenda.
Tate & Lyle on Thursday noted that ethanol market conditions were "extremely challenging with excess capacity moving industry operating margins before fixed costs into negative territory", adding that it had cut production volumes "down to the lowest practical extent".
The comments came in a report in which it flagged the challenges to the quality of the US crop, with high levels of aflatoxin.
Sure, Friday may yet throw a few bombshells to financial markets. But it entered the world stage on tiptoes.
On the macroeconomic stage, fears for the latest cash injection into Greece – due on Monday - have, temporarily, overtaken the US "fiscal cliff" for importance, with world lenders arguing over how much cash Athens should receive, and who picks up the tab in case of default.
European share markets opened barely changed, while the dollar froze, copper showed small gains, and Brent crude a small loss, of 0.2%, as of 09:10 UK time (03:10 Chicago time).
Volatility was hardly huge on agricultural commodity markets either, although this is ahead of a key report, the US Department of Agriculture's latest Wasde briefing, which could make current dealing something of a calm-before-the-storm period.
Importance of exports
Soybeans were among the most definite crops in their movements, falling 0.3% to $14.91 ¼ a bushel for January delivery.
But then, the weather in South America has taken a turn for the better, in terms of clearing the way for sowings too, enabling a rapid pick-up in the pace of plantings in Argentina, data from the Buenos Aires grains exchange late on Thursday showed.
Furthermore, the Wasde briefing is expected to raise the estimate for the US soybean crop, by some 30m bushels, and potentially the forecast for year-end inventories too.
The idea of higher inventories gained some traction when the USDA on Thursday revealed the lowest weekly soybean export figure since June last year, of some 190,000 tonnes, down from 761,000 tonnes the week before.
"It would appear that robust weekly soy export sales in recent weeks may have supported soy board while absence of strong weekly sales serves as warning that current prices are rationing demand," Richard Feltes at RJ O'Brien said.
'Really surprising'
Indeed, there are growing fears over demand from China, the top importer, too, stoked by details in the export sales report, which reported deals which had been booked to "unknown" switched to the likes of Indonesia, South Korea and Spain, besides China itself.
"This is what I think is really surprising," Kim Rugel at Benson Quinn Commodities said.
"The trade has become conditioned to assume unknown destination equals China," an analysis which on USDA figures would imply that "China has been a very active buyer with other traditional destination still needing coverage".
"My take away from Thursday's switching seems to imply that 'unknown' maybe other destinations, and that China sales are in fact below trades' estimates."
And this is, after all, against a background of poor Chinese soybean crush margins, at a negative $500 a tonne or so.
'Extra low-protein wheat'
The crop which is expected potentially to turn out most bullishly from the Wasde, in terms of estimate revisions, is wheat, with the USDA expected to cut estimates for world supplies to reflect reduced hopes for harvests in Argentina and Australia.
In fact, Australia is getting more of the rain which farmers wanted a couple of months ago, to boost grainfill, but which it now looking more of a threat to quality and harvest progress.
"The current rain event is raising fears that wheat quality may decline," Luke Mathews at Commonwealth Bank of Australia said, if adding that he was "not expecting significant quality issues to surface because of the rain event".
However, already there was a "higher-than-normal quantity of low-protein ASW wheat in northern New South Wales", typically Australia's second-ranked wheat producing state.
'Strong indication'
Furthermore, there are continued concerns over the dryness which is hampering newly-sown US winter wheat for 2013 harvest.
"Weather in the US plains continues to threaten the current winter wheat crop," Lynette Tan at Phillip Futures said, adding that it was "likely that wheat may extend its uptrend to $9.27-a-bushel levels".
Brian Henry at Benson Quinn was upbeat over values too, saying that "one factor to take away from Thursday's trade is the fact that for the first time since basically mid-July sharp increase in open interest on all three wheat markets, on days the market rallied, was not met by heavy selling during the next trading session.
"This is a strong indication of a renewed interest in owning wheat, which is healthy for the market regardless of Friday's price action."
Still, in early deals, Chicago wheat for December was 0.2% lower at $9.00 ½ a bushel.
Export signals
That left corn the best performer, adding 0.2% to $7.42 ½ a bushel, maintaining its unwillingness to stray too far from the $7.50-a-bushel mark.
Phillip Futures' Lynette Tan said: "Going forward, corn markets will likely rely heavily for signals from export demand," which have been mixed, with Thursday's export sales data poor but within the range of expectations.
And while South Korea earlier in the week passed on a tender for the grain, talk was that US offers were only at a premium of $5-10 a tonne to the South American supplies which have been taking the limelight in recent months.
Ethanol production data have been improving too, although there is some doubt over whether that can be sustained given temporary plant shutdowns on the agenda.
Tate & Lyle on Thursday noted that ethanol market conditions were "extremely challenging with excess capacity moving industry operating margins before fixed costs into negative territory", adding that it had cut production volumes "down to the lowest practical extent".
The comments came in a report in which it flagged the challenges to the quality of the US crop, with high levels of aflatoxin.
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