MARKET DEVELOPMENT
PM Markets: Soybean Futures Trim Losses on Strong US Exports
PM Markets: Soybean Futures Trim Losses on Strong US Exports
15/11/2016 (AgriMoney.com) - The ag markets got off to a bearish start, as prices in China tumbled.
The Chinese government has stepped in to restrict the boom in agricultural prices there, by raising trading fees, and increasing margin requirements.
"There is even an unconfirmed rumour that the most well known speculative fund manager was arrested," said Darrell Holaday, at Country Futures.
"Fears of more government measures to reduce speculation had investors' liquidation positions," said Kim Rugel, at Benson Quinn Commodities.
Dollar pressure
And weakness carried over into the US markets, as macro markets weighed.
"The weakness in the energy sector and the strength of the US dollar index has is capping any significant rallies," said Mr Holaday.
The US dollar was up 0.9% against a basket of world currencies, as Chicago markets closed, its highest level since the end of 2015.
Real pressure
The sharp fall in Asian palm oil prices was bearish for soyoil.
December soyoil futures finished down 1.5%, at 33.95 cents a pound, a one month low.
The Brazilian real resumed its downward slide, after steadying on central bank intervention on Friday.
The currency was down 1.5% as Chicago markets closed.
This is bearish in particularly for soybeans, as it encourages brisk selling.
Strong sales
But support for soybeans came from bumper US exports.
US weekly soybean export inspections were reported at 2.78m tonnes, up from 2.67m tonnes last week.
US soybean exports are currently running at 117% of last year's pace.
Mr Holaday said the number was "supportive for soybeans".
And there was more support as the USDA the sale of 456,000m tonnes.
January soybean futures finished down 0.1%, at 9.84 ¼ a bushel.
Egyptian support
US wheat export inspections missed exportations, at just 191,000 tonnes over the most recent week.
Mr Holaday said the lower sales "has been reflected in the lower market today".
True, there was a touch of support, as the government of Egypt, the world's top wheat importer, gave the General Organization for Export and Import Control, a branch of the ministry of trade, sole authority over wheat inspections.
The move is believed to be aimed at preventing more confusion along the lines of the uncertainty over ergot levels, which disrupted Egyptian imports this summer.
"This is viewed as a positive move by exporters," said Jenna Roe.
Big purchases
And there has been additional support from wheat buying, including a purchase of some 100,000 tonnes of soft milling wheat by Tunisia, a 50,000 tonne tender by Jordon, and another tender by Algeria.
FranceAgriMer estimates France is 90% planted for winter wheat as of November 7th. Emergence is estimated at 61%, 14 percentage points behind last year.
But wheat succumbed to the stronger dollar, as December Chicago futures finished down 2.1%, at $3.94 a bushel.
US corn export inspections were 618,000 tonnes.
December corn futures finished down 1.0%, at $3.37 ¼ a bushel.
Brazilian conditions look good
Raw sugar futures came under pressure from the weakness in the Brazilin real.
"The Brazilian real's continued weakness is triggering forward sales by Brazilian (sugar) mills to take advantage of better real pricing," said Tobin Gorey, analyst at Commonwealth Bank of Australia.
And conditions in Brazil are still looking good for the end of the crop.
"The southern Brazilian cane region got some rain over the weekend but only small areas have recorded much more than an inch so far," Mr Gorey said.
"The rain has come after several dry days, and onto soils that carry only modest moisture so it should not worry the market too much for now."
March raw sugar settled down 0.3%, at 21.63 cents a pound.
Cocoa markets slump
Cocoa prices tumbled, on ideas of a big Ivorian crop.
March New York cocoa settled down 2.1%, at $2,418 a tonne.
But coffee futures bounced back, as January robusta coffee futures settled up 3.6%, at $2,099 a tonne.
March arabica coffee settled up 1.4%, at 165.45 cents a pound.
The Chinese government has stepped in to restrict the boom in agricultural prices there, by raising trading fees, and increasing margin requirements.
"There is even an unconfirmed rumour that the most well known speculative fund manager was arrested," said Darrell Holaday, at Country Futures.
"Fears of more government measures to reduce speculation had investors' liquidation positions," said Kim Rugel, at Benson Quinn Commodities.
Dollar pressure
And weakness carried over into the US markets, as macro markets weighed.
"The weakness in the energy sector and the strength of the US dollar index has is capping any significant rallies," said Mr Holaday.
The US dollar was up 0.9% against a basket of world currencies, as Chicago markets closed, its highest level since the end of 2015.
Real pressure
The sharp fall in Asian palm oil prices was bearish for soyoil.
December soyoil futures finished down 1.5%, at 33.95 cents a pound, a one month low.
The Brazilian real resumed its downward slide, after steadying on central bank intervention on Friday.
The currency was down 1.5% as Chicago markets closed.
This is bearish in particularly for soybeans, as it encourages brisk selling.
Strong sales
But support for soybeans came from bumper US exports.
US weekly soybean export inspections were reported at 2.78m tonnes, up from 2.67m tonnes last week.
US soybean exports are currently running at 117% of last year's pace.
Mr Holaday said the number was "supportive for soybeans".
And there was more support as the USDA the sale of 456,000m tonnes.
January soybean futures finished down 0.1%, at 9.84 ¼ a bushel.
Egyptian support
US wheat export inspections missed exportations, at just 191,000 tonnes over the most recent week.
Mr Holaday said the lower sales "has been reflected in the lower market today".
True, there was a touch of support, as the government of Egypt, the world's top wheat importer, gave the General Organization for Export and Import Control, a branch of the ministry of trade, sole authority over wheat inspections.
The move is believed to be aimed at preventing more confusion along the lines of the uncertainty over ergot levels, which disrupted Egyptian imports this summer.
"This is viewed as a positive move by exporters," said Jenna Roe.
Big purchases
And there has been additional support from wheat buying, including a purchase of some 100,000 tonnes of soft milling wheat by Tunisia, a 50,000 tonne tender by Jordon, and another tender by Algeria.
FranceAgriMer estimates France is 90% planted for winter wheat as of November 7th. Emergence is estimated at 61%, 14 percentage points behind last year.
But wheat succumbed to the stronger dollar, as December Chicago futures finished down 2.1%, at $3.94 a bushel.
US corn export inspections were 618,000 tonnes.
December corn futures finished down 1.0%, at $3.37 ¼ a bushel.
Brazilian conditions look good
Raw sugar futures came under pressure from the weakness in the Brazilin real.
"The Brazilian real's continued weakness is triggering forward sales by Brazilian (sugar) mills to take advantage of better real pricing," said Tobin Gorey, analyst at Commonwealth Bank of Australia.
And conditions in Brazil are still looking good for the end of the crop.
"The southern Brazilian cane region got some rain over the weekend but only small areas have recorded much more than an inch so far," Mr Gorey said.
"The rain has come after several dry days, and onto soils that carry only modest moisture so it should not worry the market too much for now."
March raw sugar settled down 0.3%, at 21.63 cents a pound.
Cocoa markets slump
Cocoa prices tumbled, on ideas of a big Ivorian crop.
March New York cocoa settled down 2.1%, at $2,418 a tonne.
But coffee futures bounced back, as January robusta coffee futures settled up 3.6%, at $2,099 a tonne.
March arabica coffee settled up 1.4%, at 165.45 cents a pound.