Soybean and corn futures were lifted by better than expected US export sales, with healthy Chinese buying evident amid cheerier macroeconomic picture on Thursday, while wheat sunk on growing evidence of thick global supplies.
And the bullish tone in global markets helped sugar prices up 5%, to a 3-1/2 week high.
Chinese stock markets rose for the first time in a week on Thursday, as the Shanghai Composite Index rose for first time in a week.
Global stock markets seemed to be breathing a sigh of relief, with the Japanese, European, and US markets all trading up.
And crude oil followed suit, as Brent crude shot up nearly 8% the fastest rise in 6 years, trading at $46.38 a barrel toward the end of Chicago trading, helped by supply line disruptions in Nigeria.
Higher oil prices are supportive for biofuel feedstock such as soybeans and corn.
But the stronger markets and some unexpectedly good jobs data, as well as some hawkish rumbling from the US central bank, helped push to the dollar up around 0.6% against a basket of currencies toward the close of the Chicago markets.
And market fundamentals were also good, as weekly export sales data from the US Department of Agriculture showed that demand had not suffered as badly as was feared in last week’s
True, 131,600 tonnes of old crop soybean contracts were cancelled, but Joe Lardy of CHS Hedging commented that the cancellations were “not a huge surprise at the end of the year”.
He noted that this season’s export sales were still nearly 2% ahead of the US Department of Agriculture’s export figures.
And new crop soybean sales smashed expectations, coming in at 1,475,400 tonnes, where trade had looked for 600,000 tonnes, with soymeal and soyoil export sales ahead of expectations as well.
Chinese buying accounted for 883,00 tonnes of those sales, indicating that fears of a fall in Chinese demand were at least premature.
November soybeans closed up 1.5% at $897 a tonne.
Corn exceeds hopes
There was also a net cancellation in old crop corn sales of 131,800 tonnes, where markets hopes for sales of 50,000 tonnes.
But new crop corn sales came in at 986,600 tonnes, where markets had expected just 450,000 tonnes.
This is by far the biggest corn sale so far this year.
December corn futures finished 0.3% up at $375 a tonne.
Wheat exports were 529,100 tonnes, well ahead expectations of 225,000 tonnes.
“The sales pace so far puts things slightly above the levels needed to meet the USDA number,” noted Mr Lardy.
But prices came under pressure as evidence mounted as to the thickness of global supplies, as the Egyptian state grain buyer purchased Russian wheat at $190.07 a tonne, the lowest price in years, underlining the competitiveness of Russian product.
On Thursday the International Grains Council ditched expectations of a fall in inventories next year, as it forecast global grain inventories to 2m tonnes to 447m tonnes in 2015-16, “a 29-year peak”.
The IGC lifted its forecast for world grain production 18m tonnes higher at 1.99bn tonnes due to “larger-than-expected wheat and barley crops in the [former Soviet Union] and the European Union”.
Forecast global wheat production was upgraded by 10m tonnes to 720m tonnes, putting it in line with last season’s record high.
World corn output this season was seen at 968m tonnes, 2m tonnes above the previous estimate, but 35m tonnes below the 2014-15 record.
December Chicago wheat closed down 0.9% at $4.84 Ѕ a bushel.
Canadian harvest continues
A crop report from the Saskatchewan regional government found that 5% of the spring wheat had been harvested, and 7% of canola. The harvest had not been started at this time last year.
“Following some wet weather last weekend,” dry weather over the past few days has been favourable for maturation and harvesting of the spring wheat and canola crops,” said Kyle Tapley of MDA weather services.
September Minneapolis spring wheat closed down 0.4% at $4.94 ј a bushel, while November Winnipeg canola rose 0.6% to C$4.72.30 a tonne, supported by higher oilseed and crude oil prices.
Raws leap on currency, macros
Softs got a boost from the easing global fears, while a 0.9% jump in the Brazilian currency gave an added boost to coffee and sugar prices.
Sugar was the biggest winner, as rains threatened to slow harvesting the Brazil’s cane belt.
New York October raw sugar shot up, touching a 3-1/2-week high, and settling up 5.0 percent, at 11.06 cents a pound.
Jack Scoville of Price Futures commented that recent resilience in sugar prices “could signal a rejection of a new leg down and imply that the market is finally finding a low”.
Coffee prices also benefited from the rising real, and the prospect of resilient global demand.
December arabica coffee bounced from 1-1/2 year lows, to finish up 1.9%, at 124.55 cents a pound. November robusta coffee finished up 1.6% at $1,641 a tonne.
New York December cotton finished up 1.4%, at 63.35 cents a pound.
(Source – http://www.agrimoney.com/marketreport/pm-markets-chinese-soy-demand-surprises-market–3271.html)