PM markets: rallying soybean futures can't help cereals
Harvest pressure and heavy stocks weighed on corn and wheat futures, while soybeans were supported by booming vegetable oil markets.
For wheat, "global supplies are still plentiful and the strong dollar keeps US exports at bay," said Ami Heesch, at CHS Hedging.
CHS Hedging, saw corn "coming under hedge pressure from the advancing U.S. harvest.
Soybeans can't lift wheat
Richard Feltes, at RJ O'Brien, saw the corn and wheat markets as "reluctant to jump on bull soy bandwagon".
Mr Feltes saw wheat demand from global tenders easing up.
And for corn, Mr Feltes said saw the "portion of corn harvest typically triggering forced farmer corn selling still ahead".
Weak export inspections
A bearish tone in the cereals was encouraged by some disappointing export inspection figures from the US Department of Agriculture.
Corn export inspections for the most recent week were reported at 542,000 tonnes, below expectations of 900,000 to 1.1m tonnes.
Wheat export inspections also missed expectations, at 244,000 tonnes, just over half the levels seen last week.
Bearish data on hedge fund positions
Broker Benson Quinn Commodities saw weekly commitment of traders data from the Commodity Futures Trading Commission as unsupportive.
The data showed that speculators covered short position over the week to last Tuesday, suggesting there may be less short-covering appetite to fuel future rallies.
Benson Quinn said the selling had bought the size of the speculative net-short to "manageable" levels.
"Combined with the weakish tone in the technical, it doesn't look like there is a good reason to expect the funds to stay on the buy side in the corn market".
And in wheat, Benson Quinn said the latest report suggests that "funds have covered enough of their short position".
European weather turns wet for next year's crop
The latest report from the Mars, the EU crop monitoring body, suggested that after a dry September, rains have improved prospects for winter wheat there.
"Rains of these last few days in Europe, including France, are good for autumn sowing," said Paris-based consultancy ahead of the reports release.
"By the end of this week, temperatures should raise and will favor the development of seeding."
December Paris wheat futures finished down 0.8%, at E161.75 a tonne.
December Chicago wheat futures punched back below through the 50-day moving average for the first time in a week-and-a-half.
The contract finished down 2.7%, at $4.02 ½ a bushel, the lowest level since October 13.
December corn extended losses, after breaking below the 10-day moving average, finishing down 1.1%, at $3.48 ¼ a bushel.
Strength in soybeans
But soybean futures were supported by the strength in global vegetable oils.
December soybean oil futures finished up 2.3%, at 35.99 cents a pound, after reaching a two-year high of 36.23 cents a pound.
US export inspections were also supportive, being reported at 2.74m tonnes, ahead of estimates and also of last week's figures.
November soybean futures finished up 0.8%, at $9.92 a bushel, after reaching as high as $9.99 ¾ a bushel, the highest level for the front month since mid-September.
Brazilian currency strength
Sugar and coffee futures were supported by the real, which rose over 1% against the dollar, hitting a more-than-two-month high of R$3.113 to the dollar.
Aside from one session on August 10, this is the strongest the real has been since the June 2015.
This was supportive for sugar and coffee as Brazil is the top export of those commodities, and a stronger real reduces local-currency returns, discouraging growers and exporters.
Coffee markets are being supported by expectations of production deficits, particularly for robusta where serious dryness concerns have developed in key growing areas.
January robusta futures settled up 0.4%, at $2,161 a tonne after hitting $2,163, the highest level for the second month in two years.
December arabica coffee settled up 1.2%, at 157.90 cents a pound.
Hedge fund long gets more manageable
Sugar prices got additional support from reports that the Chinese government released less of its sugar reserves than expected.
And the CFTC report showed speculators cut their net-long position for the third week running.
"This looks as if it has been greeted as bullish news so far, although the position is still large and still represents over 30% of the Open Interest including options," noted Nick Penney, at Sucden Financial.
March raw sugar futures settled up 2.2%, at 23.20 cents a pound.