02/03/2013 (Agrimoney.com) - Trader lore has it that the start of the month brings fresh money into agricultural commodities, just as month ends see positioning closing as funds tidy up positions.

And it seemed to be, kind of, working in early deals, with the main contracts rising despite some weak data from China which put a bit of a dampener on broader market mood.

'Bleak export data'
The buying had trouble stretching as far as Kuala Lumpur, where palm oil stood 0.3% lower at 2,391 ringgit a tonne as of 09:30 UK time (03:30 Chicago time), threatening an eighth successive close lower.

The vegetable oil has suffered what Phillip Futures analyst Ker Chung Yang termed "bleak export data", with cargo surveyors pegging Malaysia's palm exports down by 8.8% last month, according to Societe Generale de Surveillance, or 9.1%, according to Intertek Testing Services.

That has lowered the prospect of shipments chipping away at Malaysia's near-record palm inventories, even during a seasonally weak production period.

Furthermore, a trade survey revealed that palm oil inventory held at ports in China, the second-biggest importing country, hit a record 1.4m tonnes last month, lifted by slow growth in demand and record purchases in December, ahead of a tightening on quality standards.

India relief
That said, there is hope for bulls, with a recovery in rival vegetable oil soyoil (see below).

Soyoil suffered in Chicago in the last session after the delivery of more than 2,900 contracts against the expiring March contract, an indication of loose supplies (unlike those of fellow soy crush product soymeal, and indeed of soybeans themselves).

And Mr Ker did highlight a boost from a postponement, at least, in a decision by India on whether to raise taxes on palm oil imports.

"India, the world's largest vegetable oil buyer, did not raise its import tax imposed in January to cut rising purchases from Malaysia and Indonesia," he noted.

'Rain hopes in trouble'
In Chicago, it was wheat which once again led the big three crops, adding 0.8% to $7.13 ¼ a bushel for March delivery, and 0.6% to $7.19 a bushel for the better-traded May lot.

Ideas are easing over further moisture to refresh US Plains winter wheat which, even after the latest round of snow, faces drought conditions.

All of Kansas, the top wheat producing state was still in drought as of Tuesday, the US Drought Monitor said.

And looking ahead, "all that talk about a wetter-than-normal March in the Plains and Midwest is in trouble", weather service WxRisk.com said.

Weather models are in disagreement over a moisture band forecast in the 11-to-15 day outlook.

"This feature over the south western states has the potential to bring some decent rain to portions of the central and lower Plains, as well as the Delta, but the weather models are not in good agreement with how this feature develops," WxRisk.com said.

"Some of the weather models of developing a significant rain over the Delta and extending up into the Midwest, bypassing most of the central and lower Plains."

'More positive stance'
Technically, things are looking up for wheat too – a bit.

"Daily momentum studies continue to firm, and weekly studies are slowly shifting to a more positive stance", Benson Quinn Commodities said.

"But it hasn't broken the downward. I would not be surprised to see the current correction continue for a couple more days.

"But, in the absence of fresh fundamental support, the bulls are going to have a difficult time sustaining a rally."

Some fundamental support could come later if the result expected of a Saudi Arabia tender goes the right way, as far as the US is concerned.

Rins aid
Still, while wheat caught up a little on fellow grain corn, it could not regain its accustomed premium, with Chicago corn for March adding 0.5% to $7.22 ¾ a bushel, and the May contract this time keeping up, in gaining 0.5% to $7.07 ¼ a bushel.

The grain, like soybeans, is gaining support from continued talk of port hold-ups in rival exporter Brazil, where ships are said to be waiting 60 days to fill up.

Which was one explanation for solid US weekly export sales released on Thursday of more than 500,000 tonnes, old crop and new, and with rumours of Chinese buyers interested in more 2013-14 shipments.

Domestic demand hopes, meanwhile, have gained a fillip from the strong price of ethanol Rins – paper credits which blenders can use instead of the biofuel itself to meet mandates – and which, in relating to producers, give an extra boost to production margins.

Technically, the May lot, having regained its 20-day moving average in this session, next faces the potential resistance at the 50-day moving average, at about $7.08 ½ a bushel.

Spreads unwound?
It was soybeans which lagged in early deals, with a suspicion of profit-taking as the beans themselves and soymeal, which have been the strongest of late, fell, while soyoil for March gained 0.9% to 49.27 cents a pound.

The complex is prone to internal spreading which can produce unexpected movements as it is unwound.

Speculators signally, in the first three weeks of February (the latest data available) lifted a net short position in soyoil, which raising net longs in soymeal and soybeans themselves.

Trader talk on soybeans remains upbeat, especially after export sales data on Thursday which showed a revival in interest in 2012-13 crop, of which there is little left.

Indeed, total actual shipments have reached 1.1bn bushels half way through 2012-13, for which the USDA is predicting 1.345bn bushels for the whole season.

'Record pace'
Counting in forward sales there is even less elbow room

"Export sales percentages for the complex for the marketing year as of today, with six months to go, stand at 94.5% for soybeans, compared with an average of 82.5%, soymeal at 92.1%, average 63.1%, and soyoil at 77.8%, average 57.2%," Mike Mawdsley at Market 1 said.. "The complex is at a record pace."

A key technical point is seen at $15 a bushel, which has represented a ceiling for the March contract for some three months, although the lot remained well short in early deals, standing at $14.74 ¼ a bushel, unchanged on the day.

The May contract, which has not seen $15 a bushel for four months, stood down 0.75 cents at $14.51 ½ a bushel.

March soymeal was 0.1% lower at $434.50 a short ton.