30th Nov 2012, by Agrimoney
The idea that month-ends bode ill for agricultural commodities received a vote of support on Friday when the close of November witnessed broad declines in grains and oilseeds, and some among softs too.
In New York, arabica coffee returned to backward movement, sliding 3.7% to 150.60 cents a pound for March delivery, within a couple of cents of its two-year closing low.
While trade data showed coffee exports overall increasing by some 17.3%, year on year, in October, the first month of 2012-13, the increase was all in robusta beans, with arabica shipments easing 1.9% to 66.2m bags.
Losses in London robusta beans for January were limited to 1.2%, taking them to $1,914 a tonne.
'Leaving its mark'
In Chicago, the main crops also recorded losses bigger than the 0.2% average, as measured by the CRB index, for commodities, on a day when US "fiscal cliff" fears injected a note of caution.
Wheat was worst hit among Chicago's big three, as the day added only more reasons to sell, beyond the upgrade to the Chinese crop, and weak US export sales, flagged earlier.
For one, South Korea bought Australian wheat, offering another "reminder that competition is around the world", which US supplies are only struggling harder to match after their seven-day winning streak, broken on Thursday.
"The increased price level is clearly leaving its mark on demand for US wheat," Commerzbank analysts said.
'Promoting a negative tone'
Indeed, Russia looks set to export 9.5m tonnes of wheat in 2012-13, some 2m tonnes more than previously expected, SovEcon chief executive Andrei Sizov senior said, if offering bulls some consolation in terms of the forecast for the 2013 harvest.
He pegged Russia's overall grains crop in 2013 at 84m tonnes, well above the 70.5m tonnes this year, but below 2011's 94m-tonne result, citing relatively weak winter crop condition in southern areas.
But perhaps the biggest depressant to wheat prices was the announcement of the delivery of 2,119 contracts against Chicago's expiring December wheat contract, signalling the attractions of selling through futures rather than on the cash market.
"Deliveries this morning were larger than expected on the grains. This is helping to promote a negative tone," US Commodities said.
"If grains are so valuable why let the deliverable supplies go?"
'Good stoppers have not surfaced'
At rival broker Country Futures, Darrell Holaday said: "Most of the weakness today can be tied back to large deliveries against the December wheat contract," and to December soyoil too, against which 2,200 lots were put up for sale.
"These large deliveries have put those markets on the defensive as good stoppers in those markets have not surfaced," ie enthusiasm for selling against the contract seems greater than buying.
March wheat fell 2.5% to $8.63 ½ a bushel in Chicago, a decline fuelled by technical weakness, after the lot proved unable to hold 10-, 20- and 50-day moving averages.
EU 'dynamism'
European contracts got some support from a resilient export performance, with EU shipments rising to 438,000 tonnes this week, taking the total so far in 2012-13 to 7.3m tonnes, 800,000 tonnes ahead of the figure at the same time last season.
"It remains to be seen whether this dynamism will continue over the next few weeks, for EU wheat is now significantly more expensive than US wheat," Commerzbank said.
"One tonne of EU wheat costs just under $360 at present, compared to a good $320 for a tonne of US wheat."
Still, Paris wheat for January closed down 1.6% at E269.50 a tonne, while
London wheat for May edged 0.9% lower to £227.00 a tonne, given some support by yet more evidence, from an Adas report, of the dire start for UK winter crops.
'Negative psychology'
There were deliveries against December corn too, although at 248 lots, that was not such a big issue.
What some investors took more notice of was pressure by the AAA, the US motor club, on the Environmental Protection Agency to ditch approval of E-15, the high-ethanol gasoline blend, warning that confusion may be leading motorists to use it in older cars, rising engine damage.
"The amount of E-15 that is actually being sold is minimal," Mr Holaday said.
"But it does create some negative psychology."
Still, with South American weather a revived concern, and a threat in particular to corn, which is earlier sown than soybeans, the grain's fall was limited somewhat, to 0.8%, taking Chicago's March lot to $7.52 ¾ a bushel.
Soymeal signal
Soybeans proved a better bet than wheat too, dropping 0.6% to $14.38 ¾ a bushel for January delivery, gain some support from the demand for its products which has seen strong exports of soymeal and, especially, soyoil of late.
Analysis of US export sales and shipment data for soymeal implies the equivalent in soybean terms of 210m bushels.
"For the entire crop year, USDA is projecting we will need 329m bushels of soybeans crushed to meet the soymeal export sales. Therefore, that is well ahead of projections," Darrell Holaday said.
"No matter how you examine it, one would have to believe that USDA will increase the US soybean crush 10m-20m bushels" in its next Wasde crop report.
That offered some offset to disappointment at the soyoil deliveries, and at Thursday's below-expectation US weekly soybean export sales data.
The idea that month-ends bode ill for agricultural commodities received a vote of support on Friday when the close of November witnessed broad declines in grains and oilseeds, and some among softs too.
In New York, arabica coffee returned to backward movement, sliding 3.7% to 150.60 cents a pound for March delivery, within a couple of cents of its two-year closing low.
While trade data showed coffee exports overall increasing by some 17.3%, year on year, in October, the first month of 2012-13, the increase was all in robusta beans, with arabica shipments easing 1.9% to 66.2m bags.
Losses in London robusta beans for January were limited to 1.2%, taking them to $1,914 a tonne.
'Leaving its mark'
In Chicago, the main crops also recorded losses bigger than the 0.2% average, as measured by the CRB index, for commodities, on a day when US "fiscal cliff" fears injected a note of caution.
Wheat was worst hit among Chicago's big three, as the day added only more reasons to sell, beyond the upgrade to the Chinese crop, and weak US export sales, flagged earlier.
For one, South Korea bought Australian wheat, offering another "reminder that competition is around the world", which US supplies are only struggling harder to match after their seven-day winning streak, broken on Thursday.
"The increased price level is clearly leaving its mark on demand for US wheat," Commerzbank analysts said.
'Promoting a negative tone'
Indeed, Russia looks set to export 9.5m tonnes of wheat in 2012-13, some 2m tonnes more than previously expected, SovEcon chief executive Andrei Sizov senior said, if offering bulls some consolation in terms of the forecast for the 2013 harvest.
He pegged Russia's overall grains crop in 2013 at 84m tonnes, well above the 70.5m tonnes this year, but below 2011's 94m-tonne result, citing relatively weak winter crop condition in southern areas.
But perhaps the biggest depressant to wheat prices was the announcement of the delivery of 2,119 contracts against Chicago's expiring December wheat contract, signalling the attractions of selling through futures rather than on the cash market.
"Deliveries this morning were larger than expected on the grains. This is helping to promote a negative tone," US Commodities said.
"If grains are so valuable why let the deliverable supplies go?"
'Good stoppers have not surfaced'
At rival broker Country Futures, Darrell Holaday said: "Most of the weakness today can be tied back to large deliveries against the December wheat contract," and to December soyoil too, against which 2,200 lots were put up for sale.
"These large deliveries have put those markets on the defensive as good stoppers in those markets have not surfaced," ie enthusiasm for selling against the contract seems greater than buying.
March wheat fell 2.5% to $8.63 ½ a bushel in Chicago, a decline fuelled by technical weakness, after the lot proved unable to hold 10-, 20- and 50-day moving averages.
EU 'dynamism'
European contracts got some support from a resilient export performance, with EU shipments rising to 438,000 tonnes this week, taking the total so far in 2012-13 to 7.3m tonnes, 800,000 tonnes ahead of the figure at the same time last season.
"It remains to be seen whether this dynamism will continue over the next few weeks, for EU wheat is now significantly more expensive than US wheat," Commerzbank said.
"One tonne of EU wheat costs just under $360 at present, compared to a good $320 for a tonne of US wheat."
Still, Paris wheat for January closed down 1.6% at E269.50 a tonne, while
London wheat for May edged 0.9% lower to £227.00 a tonne, given some support by yet more evidence, from an Adas report, of the dire start for UK winter crops.
'Negative psychology'
There were deliveries against December corn too, although at 248 lots, that was not such a big issue.
What some investors took more notice of was pressure by the AAA, the US motor club, on the Environmental Protection Agency to ditch approval of E-15, the high-ethanol gasoline blend, warning that confusion may be leading motorists to use it in older cars, rising engine damage.
"The amount of E-15 that is actually being sold is minimal," Mr Holaday said.
"But it does create some negative psychology."
Still, with South American weather a revived concern, and a threat in particular to corn, which is earlier sown than soybeans, the grain's fall was limited somewhat, to 0.8%, taking Chicago's March lot to $7.52 ¾ a bushel.
Soymeal signal
Soybeans proved a better bet than wheat too, dropping 0.6% to $14.38 ¾ a bushel for January delivery, gain some support from the demand for its products which has seen strong exports of soymeal and, especially, soyoil of late.
Analysis of US export sales and shipment data for soymeal implies the equivalent in soybean terms of 210m bushels.
"For the entire crop year, USDA is projecting we will need 329m bushels of soybeans crushed to meet the soymeal export sales. Therefore, that is well ahead of projections," Darrell Holaday said.
"No matter how you examine it, one would have to believe that USDA will increase the US soybean crush 10m-20m bushels" in its next Wasde crop report.
That offered some offset to disappointment at the soyoil deliveries, and at Thursday's below-expectation US weekly soybean export sales data.
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