The dollar fell back, and for some crops US export sales data were decent too.
But that did not make for a universally upbeat day in agricultural commodities, nonetheless.
Indeed, the prevailing direction was downwards, with the Bcom agriindex standing 0.6% lower in late deals, heading back towards its lowest levels since 2008, as reached last month.
Sure, raw sugar for March stood up 0.9% at 13.96 cents a pound in New York, amid a focus on the forthcoming expiry of the October contract.
“Market talk is of a hefty delivery but that is by no means certain,” said Tobin Gorey at Commonwealth Bank of Australia.
In fact, the October contract added 1.2% to 13.23 cents a pound, in a positive signal to the market, with recovery in the real helping too, in boosting the value in dollar terms of Brazilian assets.
And New York cotton futures for December stood up 0.6% at 69.07 cents a pound, helped by strong US export sales data, of some 210,000 running bales last week, upland and pima cotton combined.
‘Rains should be widespread’
However, arabica coffee failed to join in the gains, dropping 1.0% to 128.10 cents a pound in New York for December delivery, amid increasing confidence in Brazilian rains.
“Rains will finally return to Brazil tomorrow and should be widespread this weekend and early next week, leading to notable improvements in soil moisture across all but far north eastern growing areas,” said MDA.
And the Brazilian rain factor helped depress soybeans too, which stood down 0.6% at $9.59 ¾ a bushel in Chicago for November delivery, in late deals.
Indeed, Richard Feltes at broker RJ O’Brien flagged pressure on soybean prices in particular from “confirmation of Brazil rains open US harvest, with most US soy yields exceeding expectations, caution ahead of Friday’s crop report and next week’s lull in demand from China”.
Friday brings the US Department of Agriculture’s latest quarterly report on US stocks of crops including soybeans, while China is holiday for week, curtailing talk of Chinese soybean buyers on the prowl.
Record export sales?
In fact, the weekly US soybean export sales data for soybeans (for last week, ahead of the Chinese holiday) were very strong, at 2.98m tonnes, largely to Chinese buyers.
That is the biggest single-week sales figure on data going back to 1990.
After a slow start to 2017-18 for forward export sales, “the gap between last year and this year has narrowed significantly in the soybeans to 15%”, Darrel Holaday at Country Futures said.
Still, as Tregg Cronin at Halo Commodity Cocmpany said, “soybeans continue to find themselves under pressure as harvest expands, farmers appear to be willing sellers, cash markets continue weaker and the market looks for homes for what will be the largest crop ever produced by 125m bushels”.
‘Very poor sales’
Corn futures also fell, by 0.5% to $3.52 ¼ a bushel for December, not surrounded by quite the same noise of better-than-expected US harvest yields, but not benefiting from strong US export sales figures either.
Corn export sales, at 320,200 tonnes fell well short of market estimates of at least 500,000 tonnes, and a figure termed “very poor” by Country Futures’ Darrell Holaday who noted that US export commitments for the grain in 2017-18 were running 39% behind year-ago levels.
At least the worries over the Environmental Protection Agency review of the US corn mandate, and potentially counting exports towards it, fell away a touch.
“I don’t think this is a big market changer given the economic incentive to produce and use ethanol, but it could be if the long price relationships changed,” Mr Holaday said.
Wheat futures stood down 1.2% at $4.56 a bushel in Chicago for December delivery, despite some decent US export sales data, of 435,600 tonnes, a rise of 42% week on week.
On the negative side are rains forecast for Australia, where crops have been suffering from drought.
“Rains in eastern areas next week should improve moisture and will halt additional yield loss for wheat,” said MDA.
There is also some positioning in the wheat market ahead of USDA data on Friday expected to show a downgrade to the US wheat harvest, thanks to dryness in the northern Plains, but by how much?
“During the height of the euphoria in May and June, hard red spring wheat traded almost straight up as production ideas dropped to the low 300m-bushels area, with some even slipping below that,” said Halo’s Tregg Cronin.
Now, the market “is looking for a crop of around 350m bushels versus the 364m bushels” at which the USDA currently pegs the crop.
“Odds are decent as harvested acres drop, the US average yield will improve, but it is a matter of where those two finally intersect.”
(Source – http://www.agrimoney.com/marketreport/pm-markets-brazil-rains-overshadow-mega-us-soy-export-sales–4281.html)