Farmers' rogues gallery gained a new name on Wednesday, Guenther Oettinger, the European energy commissioner, who with but one comment nailed a revival in financial markets.
The crisis at Japan's stricken Fukishima nuclear plant was "effectively out of control", he said, an analysis blamed for stoking concerns about the crisis, and putting a fragile recovery in agricultural commodity, and other, markets on the ropes.
"What did he think he was doing? Has he got a short on or something?" was the assessment of one crop investor that Agrimoney.com spoke to.
At North America Risk Management Services, Jerry Gidel said: "It is difficult is to justify what is going on.
"The information out there, it may not mean that corn should be flying. But does it deserve to be 20 cents lower? No.
"Nuclear energy is something that everyone is highly sensitive about."
Bahrain rumpus
In truth, Mr Oettinger was given an undue share of the blame. Bahrain, for instance, also had a part to play in quelling the rebound in investor optimism sparked by a strong rebound in Tokyo stocks.
At least four people were killed in a crackdown in Bahrain, with unrest also reported in Algerian, Syria and Yemen.
So oil rose above the fears for the world economy which depressed shares and agricultural commodities, adding 0.6% in New York, while Brent crude gained 1.6% to rise back above $110 a barrel. And appeciating oil itself is a further depressant to hopes for economic prosperity.
Indeed, farm commodities proved less able to overcome headwinds which included a 0.6% rise in the dollar too, so weakening the competitiveness of dollar-denominated assets as exports.
Export trade lost?
Corn was the worst hit, closing down 3.1% at a two-month low of $6.16 ½ a bushel for May, amid talk of the crisis in Japan, the top importer, lowering its demand.
"Japan is still the problem, with the overall consensus being that 40m-50m bushels of corn sales are in jeopardy in the current crop year," Darrell Holaday at Country Futures said, while saying this estimate was "really just a shot in the dark".
Still, it was given some credence by, conflicting, reports of ships unable to unload in Japan.
Benson Quinn Commodities said that "while port capacity appears to be adequate, many questions remain regarding the interior infrastructure".
Corn vs wheat
Technical factors were given some of the blame too, such as the fall through the important 100-day moving average line, and given the historically low spread between wheat and corn, which started the day less than $0.32 a bushel between Chicago's May lots.
That encouraged wheat buying which "helped wheat settle early on", Mr Gidel said.
And then there is the US sowings battle too to ponder, with price ratios between corn and soybeans "at exactly" the level of 2.1 "which would favour corn" plantings, according to Toepfer International, the German grains giant.
In fact, in new crop terms, corn didn't do so badly, closing up 0.2% at $5.49 ¼ a bushel for December delivery, led by soybeans for November which added 1.0% to $12.50 ¾ a bushel.
The better performance of new crop versus old crop corn, favouring the so-called bear spread, "is not bullish, because it is certainly not a sign of a market trying to ration only crop supplies", Mr Holladay said.
Fundamental talk
And, indeed, wheat was unsettled, ending down 0.9% at $6.62 a bushel for May delivery, and falling by one-quarter in less than a month.
Soybeans were the standout performer, finishing up all of 0.2% at $12.87 a bushel for May, helped by fundamentals, for a change, and the persistent, Australia-reminiscent rains dogging Brazil's harvest.
"The problems produced by the heavy rains in Brazil continue to develop as the means of transporting goods to ports have been damaged and harvest has been delayed in some areas," Benson Quinn Commodities said.
US Commodities added: "If wet weather continues, they may see some production loss," and some forecasters are already beginning to trim estimates.
Losing streaks broken
At least European agricultural commodities had a weaker euro on their side, helping Paris wheat for May close 1.6% to the good at E206.25 a tonne, the first positive finish this month for the spot lot, on a continuous chart.
London May wheat did even better, jumping 4.7% to £178.00 a tonne for May, the first positive finish in nine trading days.
Paris rapeseed for May closed up 2.2% at E421.50 a tonne, helped by a Toepfer report highlighting raised winterkill in the German crop, the European Union's biggest.
Head and shoulders?
Soft commodities were a mixed bunch too. Cocoa fell 1.2% to $3,215 a tonne in New York, for May, to its lowest close in nearly two months, as funds retreated.
And cotton, whose status as a non-food agricultural commodity makes it more sensitive to changes in economic prosperity, tumbled 3.1% to 185.12 cents a pound for May.
However, sugar was helped by resisting pressure to fall below its 200-day moving average, at 25.28 cents a pound, with New York's May lot ending 0.2 cents higher at 25.85 cents a pound.
Not that this is necessarily as good news as it seems.
"The chart technicians seem to suggest repeated closes below 27 cents will confirm a head and shoulders topping indicator which would suggest something around a further 4 cents correction to around 23 cents," Thomas Kujawa at Sucden Financial said.
"The bulls need the market above 27 cents sooner rather than later."
No comments:
Post a Comment