LONDON (Commodity Online): Agricultural commodities started the year positively, supported by supply worries and a weaker dollar, said Barclays Capital in a snippet.
According to Barclays, Front month March Wheat contract edged up by 4.25 cents and closed at $6.57/bushel. The same Corn contract rose to a fresh two-month high and closed at $6.59/bushel, while the front month soybean contract posted gains of 19.75 cents to settle at $12.18/bushel, supported by ongoing fear of reduced yields in South America owing to a drought.
However, prices have eased back in early morning trade on Wednesday. Across the softs, Sugar started the New Year with an impressive rally as it surged more than 5% to settle at 24.51 cents/lb but potential upside is capped by large crops in the EU, Russia, Ukraine, India and Thailand.
ICE Cocoa and Coffee edged up by 0.28% and 0.15%, respectively. Cotton surged over by 4% to close at 95.8 cents/lb. The International Cotton Advisory Committee said in a report yesterday that global cotton production will fall to 24.9 mt in the 12 months starting 1 August from 26.8 mt a year earlier.
Meanwhile, latest CFTC data for the week ending 27 December showed that tactical investors held a largely positive view on agricultural markets, reducing positive exposure only to Sugar and cotton. Across the CBOT grains, non-commercial net fund length in Corn increased by 20.5K lots to 154.8K lots, attributable primarily to short covering (17.1K lots).
Net fund positions in CBOT Wheat increased by 9K lots, as short covering activity (10.8K lots) more than offset long liquidation (1.9K lots). Across the soybean complex, net fund positions increased owing mainly to short covering activity; however, net fund positions in soybean meal and oil remain in net short territory at -17.5K lots and -8.2K lots, respectively.
Across the ICE soft commodities, net fund positions in Cocoa and Coffee increased by 0.9K lots and 0.3K lots, respectively. Meanwhile, net fund length in sugar decreased by 2.8K lots with the establishment of fresh short positions more than offsetting the addition of fresh long positions. Finally, net fund length in Cotton fell by 1.6K lots on the addition of fresh short positions (1.6K lots).
