Across the CBOT grains, corn and wheat closed modestly higher, while soybeans inched 6.75 cents lower to close at $12.13/bushel on the day. Corn prices edged 2.25 cents higher to close at $6.56/bushel, while wheat edged 0.74 cents higher to close at $6.37/bushel. Soybean prices are trading lower this morning, pressured by rapid planting progress in South America.
A weakened La Nina during the development of Brazil’s 2011/12 crops should have limited impact on the country’s corn and soy output (Reuters). It was reported today that Ukraine could lose up to 30% of its winter grains for the 2012 harvest due to a severe drought, which has severely delayed sowing (Reuters). Further, market participants are likely to be cautious ahead of Wednesday’s USDA November WASDE report.
Across ICE soft commodities, cocoa and sugar posted declines of 0.85% and 0.31% respectively on the day as doubts remained surrounding Europe’s bailout package. Coffee bucked the trend, posting a gain of 3.4 cents to close at $2.30/lbs and cotton managed to end 0.63% higher, after four consecutive days of losses. Latest weekly CFTC data for the week ending 1 November showed tactical investors held a mixed view on agricultural markets, in contrast to the previous week’s largely positive view. Across CBOT grains, non-commercial net fund length in corn rose by 4.4K lots to 269.3K lots, with the establishment of fresh long positions (7.9K lots) more than offsetting the addition of fresh short positions (3.5K lots). Net fund position in CBOT wheat fell by 5.2K lots, attributable to a combination of long liquidation (1.4K lots) and the addition of fresh short positions (3.8K lots). Net fund positions fell across.
Courtesy: Barclays Capital
