LONDON (Commodity Online): Agricultural commodities closed broadly higher on Monday, buoyed by external markets, although closing below intra-day highs.
Accorcing to Barclays, front-month CBOT Corn closed 9.25 cents higher while soybeans rose 14.5 cents on the day. Wheat prices were mixed, with front-month CBOT and MGEX prices up on the day by 0.25 cents and 3.75 cents, respectively, while KBOT prices pulled back. The agri complex is firmer in early morning trade on Tuesday, but price action is likely to be directed by external markets and the vagaries of macro-economic sentiment.
ICE Sugar prices edged up from recent five and a half month lows to close at 23.12 cents/lb. In news, Unica said sugar output in Brazil's center-south in the first half of November fell 13.8% y/y as more mills finished crushing the 2011-12 cane crop. From April through mid- November, sugar output totalled 30.5mn tonnes, down 4.7% y/y; the cane crush fell 8.8% y/y to 479.4mn tonnes while Ethanol output declined 16.6% y/y to 20bn litres.
About 48.4% of the crop was directed to sugar production through mid-November, up from 45.2% in 2010-11 with the remainder going to ethanol production. Average cane quality in the period stood at 137.8kg, down from 141.3kg in the same period last season. Adverse weather conditions and aging cane fields will make Brazil's center-south post its first drop in cane output in more than a decade this season. For 2012-13 (April-March), industry officials see a partial recovery in output.
Latest weekly CFTC data for the weekending 22 November showed that tactical investors continued to hold a negative view on agricultural markets, increasing positive exposure only to coffee.
Across the CBOT grains, non-commercial net fund length in Corn fell by 34.4K lots to 227.8K lots (its lowest level since July 2010), on a combination of long liquidation (23.6K lots) and the addition of fresh short positions (10.8K lots).
Net fund positions in CBOT Wheat fell by 7.1K lots to -56.3K lots (its lowest level since March 2010), attributable to the addition of fresh short positions (7.7K lots).
Net fund length in soybeans more than halved, falling by 13.2K lots to 11.4K lots (after having halved the previous week as well; lowest since April 2010). The decline in net fund length was attributable once again to a combination of long liquidation (3.7K lots) and the addition of fresh short positions (9.4K lots).
Net fund positions in soybean meal fell by 6.7K lots, taking it further into negative territory at -27.1K lots (its lowest since September 2006) and by 11.7K lots in Soybean Oil to -18.7K lots (its lowest since July 2010). Net fund length across the ICE soft commodities also reflected widespread declines. Net fund positions in Cocoa fell by 1.8K lots, further into negative territory, at -4K lots.
Net fund length in Sugar fell by a sizeable 17.6K lots to 58.1K lots, on a combination of long liquidation (7.7K lots) and the addition of fresh short positions (9.9K lots). Net fund length in Cotton declined by 7.1K lots to 12.9K lots – its lowest since July 2010. In contrast, net fund length rose in Coffee by 1.9K lots on short covering activity (2.2K lots).
