08/09/2015 (AgriMoney.com) - Palm oil futures, having traded down for much of the day, ended higher – and that somewhat set the tone for agricultural commodity markets which were open on Monday, in the absence of US peers.

Palm oil for November ended up 0.8% at 2,042 ringgit a tonne in Kuala Lumpur, a finish beaten for a spot contract only once in the last month, and representing a marked recovery from the level of 2,004 ringgit a tonne hit earlier.

The resilient finish - after a weak performance by futures on the Dalian exchange in China, a major importing country – reflected largely a weakening ringgit, which stood down 1.7% at 4.3275 to $1, earlier touching a level not seen since 1998.

A weaker ringgit boosts the competitiveness of Malaysian exports, such as palm oil.

And, there was talk of decent port activity in Malaysia too, boosting hopes of better export hopes being realised.

'Extremely tight'

The strength in palm oil gave some support too to rapeseed, which in Paris ended up 0.2% at E357.75 a tonne for November delivery, although the contract failed just to end back above its 10-day moving average.

Indeed, on some technical analyses, things look poor for futures, with the 40-day moving average passing down through the 100 day, and the 20 day falling through the 200-day line.

Still, Openfield, the UK agricultural co-operative, noted that "the rapeseed global supply and demand is extremely tight on paper, which longer-term should add support" for prices, although expectations of a strong US crop of rival oilseed soybeans "will weigh heavy".

(Indeed, as an extra setback to soybean prices, US Department of Agriculture staff in Beijing came in with relatively downbeat estimates for Chinese imports of the oilseed in both 2014-15 and next season.)

In the UK at least, rapeseed producers "will be in no hurry to lock into current values", which the co-operative deemed "unattractive".

Ukraine sowings

Sticking with rapeseed, consultancy Agritel noted that in France, "sowings are well advanced" for the 2016 harvest.

(Rapeseed is one of the earliest-planted winter crops, with its sowings window ending well before that of, for example, that of wheat.)

However, in Ukraine, a notable rapeseed exporter to the European Union, "dry weather conditions hindered progress at the end of last week," Agritel said.

"Up to the middle of last week, 300,000 hectares of rapeseed have been seeded which corresponds to 36% of the total rapeseed surface estimated by the [Ukraine farm] ministry."

While rains this weekend have improved prospects, the start of this week is expected to be dry again, before moisture potentially kicks in again.

Australian upgrade

Wheat fared even better in Paris, gaining 1.1% to E168.25 a tonne for the best-traded December lot, which put in its lowest close ever to the last session.

The rebound came despite an upgrade by Abares, the official Australian commodities bureau, to its forecast for the domestic wheat harvest, lifting it by some 1.7m tonnes to 25.3m tonnes, citing "favourable" weather conditions.

While El Nino weather patterns have a history of causing dryness in eastern Australia, this one has to cause too much discontent.

Still, the upgraded crop estimate was well within the range of existing expectations. (The USDA has a 26.0m-tonne forecast for Australian wheat output in 2015-16.)

And while Ukraine's farm minister, Oleskiy Pavlenko, forecast domestic wheat exports of 15.9m tonnes, well ahead of the USDA's estimate of 13.0m tonnes, that assumes an overall grains harvest of 60m tonnes, an estimate many observers believe optimistic.

UkrAgroConsult pegs the harvest at 57.0m tonnes.

Sugar sweetens

Among soft commodities, London white sugar managed, small, gains too, of $0.10 to $352.10 a tonne for the December contract, and by $0.40 to $347.90 a tonne for the spot (and slightly better-traded) October lot.

Still, any gains at all had appeared off the cards earlier in the day, when the sweetener made a soft start.

Associated British Foods offered some support in saying that European sugar prices may be in for a rebound in 2015-16.

And Marex Spectron said that a run up in sugar futures last week "may have been fundamentally justified", noting signs such as growing premium of refined sugar over raws (indicating potentially more robust short-term demand) and weather concerns for top producing countries Brazil (too much rain) and India (too little).

However, if the market "does move higher, then the automatic expectation of massive Indian exports, higher production in Centre South Brazil," as mills switch to making sugar, rather than ethanol, from cane, "and massive stocks to rely on, may prove problematic", Marex added.

'Struggling for direction'

Robusta coffee futures for November fared less well, dropping 1.1% to $1,581 a tonne, matching a three-month closing low for the contract.

From a chart perspective, "this morning, coffee prices opened at $1,598 a tonne and consolidated within the recent range, struggling for direction," Sucden Financial said.

"Support holds near May's low at $1,566."

OK, Phan Anh Hung, chief executive of Anh Minh Coffee, late last week flagged the potential for a drop of 10% in Vietnam's coffee output this year, thanks to dry weather.

That would be a sharp contrast to the 2.6m-tonne rise to 30.0m tonnes expected by Volcafe.

But the market has heard plenty of talk before of dryness in Vietnam without it – so far – sustaining a long-term rally.