Wheat, rice lead rebound in farm commodity futures

by Agrimoney.com

Wheat and rice led a revival in agricultural commodities as buyers stepped back into risk markets, taking advantage of the post-liquidation sale in assets such as shares and raw materials.

The revival highlighted by a rebound in the FTSE 100 index of leading London shares, which recovered from intraday losses of 4.5% to close up 1.9%, was mirrored in crop markets, where all but a handful of contracts stood in positive territory in late deals.

"Overall traders are still directly dependent on outside markets for momentum," Matthew Pierce at PitGuru said.

At Chicago-based grains broker North America Risk Management Services, Jerry Gidel said: "

"All we are is a whipping boy for the stock market. Our fundamentals are secondary to whatever is going on outside."

'Some pullback justified'

Mr Gidel added that "the better weather we have had probably justified some pullback".

Crop prices as of 18:00 GMT Chicago wheat (September): $6.71 ¾ a bushel, +2.3% Chicago corn (December): $6.87 ½ a bushel, +0.3% Chicago soy: $13.02 a bushel, -0.7% New York sugar (October): 27.49 cents a pound, +1.4% (closed) London wheat: £160.70 a tonne, +2.2% (closed) Paris wheat: E193.50 a tonne, +1.7% (closed) Contracts for November delivery, unless otherwise stated

Soybeans, which face better weather for the important August pod-filling period - and for which official data overnight showed the condition of the US crop improving - remained among Chicago's losers.

The benchmark November contract stood 0.7% lower at $13.03 a bushel with half an hour's trading to go.

Corn, which also stands to benefit from better weather, nonetheless received support from its crop condition shown to be continuing to deteriorate, downgraded by two points week-on-week to 60% in the "good" or "excellent" categories. A year ago, the figure was 71%.

Chicago's December contract stood 1.7% higher at one point.

US vs Russian

But that was overshadowed by gains in wheat which, at its high, was nearly 5% higher in Chicago for September delivery.

The grain was helped by continued concerns over prospects for the quality of spring wheat in the US, and of a German crop threatened by rain.

Meanwhile, an Egyptian tender showed US wheat was nearing parity on export markets with Russian supplies renowned for their price competitiveness.

Rice gained the exchange maximum of $0.50, or 2.6%, to 17.085 cents a hundredweight for the best-traded November lot, boosted by growing concerns for the impact of heat on the US crop, and of radiation damage forcing Japan to hike imports of the grain.

See the original article >>