Wheat led grain markets higher on Monday, over fears that Russia may increase export restrictions.
The macroeconomic picture was, by the standards of last week, quiet.
Asian equity markets were higher overnight, and the FTSE and Dow only trimmed the sharp gains seen on Thursday and Friday of last week.
Oil futures fell back, as March Brent crude fell 5.6% to 30.38 a barrel as markets closed in Chicago, but is still up more than 10% from levels seen last Thursday.
And there was a touch more ag price support from Russia, as president Vladimir Putin said that the country is looking into introducing duties on exports of mineral fertilizers, in order to make them more attractive to farmers.
Russia is the world’s second-ranked potash producer after Canada.
More significant new from Russia came as Interfax news agency, which is not state owned, carried reports the Russian Agriculture ministry is considering clamping down on grain exports until the summer harvest.
The weakness of the rouble is triggering food inflation, and discouraging exports will reduce domestic prices.
But Darrell Holaday of Country Futures pointed out that increasing the export tax “reduce cash inflow into the country,” something that Russia may be loath to do.
“Currently, the consensus is that they will not implement the export tax, but there is more talk about this week than there was last week,” said Mr Holaday.
March Paris wheat finished up 1.8% at E167.25 a tonne.
Also supporting wheat was the news that speculators engaged in less short-covering than expected last week.
According to CFTC data, In the week to last Tuesday managed money trimmed its large net short in Chicago wheat by just over 1,000 lots.
“I have to respect the idea that the funds could cover more shorts,” warned Bran Henry, of Benson Quinn commodities.
March Chicago wheat rose 1.3% to settle at $4.81 Ѕ a bushel.
Soybeans got support from weather in Argentina, which has been trending dryer.
Tregg Cronin, of Halo Commodities, noted that it “seems to be a situation where they’re living rainfall to rainfall which is satisfactory as long as they keep coming”.
The US Department of Agriculture reported weekly soybean exports at 1.197m tonnes, down from 1.399m tonnes last week.
“The current pace is no better than the 5 year average and well below year ago levels,” noted Mr Holaday.
March soybeans rose 0.4% to settle at $8.80 Ѕ a bushel.
Meanwhile, US corn export inspections remain very low, at 599,765 tonnes.
Indian corn imports are continuing apace, after droughts hit the country, which is usually a net exporter.
India’s state-run PEC trading company was reported to have bought 225,500 tonnes of corn from Ukraine, with a similar size tender expected to be announced at the start of next month.
March corn ended down 0.2% at $3.69 ѕ a bushel.
Cocoa futures fell, as bean arrival from the world’s top grower Ivory Coast remain steady.
Ivorian bean arrivals so far this season were estimated at 1,014,000 tonnes, down from 1,045,000 tonnes at the same time in last year’s record season.
March New York cocoa settled down 1.9%, at $2,819 a tonne.
Net-long holds strong
Sugar futures took a tumble, after the commitment of traders showed that there was still more room for speculator short selling.
Managed money still has a net long of just over 197,000 lots in raw sugar.
Thomas Kujawa, of Sucden Finanical, reported trade estimates that “the figure would be lower by perhaps as much as 30,000-40,000 lots.
“With the hard fall and drop in the market last Wednesday, where we saw some stops triggered in the price action, and heavy volume but then some retracement back into the range on Thursday and Friday we would probably all guestimate that he net spec is still quite long and not far from the recent highs,” Mr Kujawa noted.
The size of the net-long is weighing on sugar prices, as it raises the risk of a rapid downward sell-off.
March raw sugar futures settled down 2.2%, at 14.1 cents a pound.
March robusta settled down 0.4%, at $1,389 a tonne, holding above Thursday’s 6-year low of $1,339 a tonne.
But March arabica futures settled 0.4%, at 116.45 cents a pound.
(Source – http://www.agrimoney.com/marketreport/pm-markets-wheat-rallies-on-russian-tariff-threat–3472.html)