By admin       2016-07-01

Corn and cotton futures were the losers in a volatile session following some key US government forecasts, with soybeans big winners.But wheat markets were more sanguine, as markets shrugged off the initially bearish figuresThe standout surprise from the US Department of Agriculture's acreage and stocks numbers was the news that farmers had actually sown more corn, and less soybeans, than forecast in March.The move was a shock for markets, as soybean prices have been far outperforming corn during the sowing period.Corn acres shockIt seems that farmers were paying more attention to the excellent weather conditions during the corn sowing season, than they were to the price differential in the Chicago markets."Post-mortem on 2016 US planting season is that US farmer paid more attention to early rapid early planting than to the price surge in soybeans," said Richard Feltes, at RJ O'Brien.US corn sowings were some 500,000 acres above the March forecast, at 94.1m acres, where analysts were expecting a significant cut.Futures plungeCorn futures in Chicago plunged on the news, as traders faced up to a corn crop that is better than expected, and which is not currently expected to see any major weather problems during the pollination period in July.And the latest US corn stocks number was bigger than expected as well, meaning that even more stocks will be carried in from the 2015-16 season come harvest time.Mr Feltes said the "only hope for corn longs is adverse weather which is not in the cards over the next 10 days"."Corn is trading weaker today in response to a larger acreage number being reported in today's USDA report," said Jennifer Webster, at CHS Hedging.Near contract lowsA touch of support came from the latest USDA weekly export sales numbers.True, corn export sales were slightly below expectation for the 2015-16 marketing year, at 468,500 tonnes, but ahead of 2016-17 forecasts, at 536,100 tonnes.The most-traded December contract dipped as low as $3.65 ¼ a bushel, lower than the contract has ever closed, although occasionally broke lower in late April and early march.December corn futures finished down 2.2% on the day, at $3.71 ¼ a bushel.Cotton prices slump The acreage report also had bearish news for the cotton market. Cotton prices in New York moved sharply downward, as the USDA unveiled plantings that were some 500,000 acres larger than expected, at 10.0m acres.This compares with a March forecast of 9.6m acres, and leaves the cotton planted area up 17% year on year.The increase is being driven by a huge boom in Texas cotton sowings, up 705,000 acres year on year.And US yield prospects are also looking good."As we progress into the season, excellent soil moisture in the southern US states should bode well for both yields—projected at 1.7 bales an acre—and below-normal abandonment," said Rabobank."This implies a US production above 15m bales, up 18% year on year, in contrast to production risks across India and China," the bank said.The December cotton contract settled down 2.6 percent, at 64.17 cents a pound.Soybeans win out But cotton and corn are both row crops, and with so many acres going toward them, it was unsurprising that acres for soybeans, another row crop were going to be squeezed.True, soybeans sowings were higher than forecast in March, at 83.7m acres, but still came in below analyst expectations.Funds reacted with a flurry of buying, that at least some analysts thought was overdone, particularly given that stocks were better than expected."The soybean data was not that widely bullish in our opinion," noted Terry Reilley, at Futures International.Many funds trade corn and soybean spreads, balancing long positions in one with short positions in the other, so a wave of selling on one side of the spread can prove supportive for the other commodity.Good exports, once again And there was support as US soybean exports were toward the top end of analyst expectations, with 730,000 tonnes booked for export in 2015-16, and 798,000 tonnes for shipment in 2016-17, the highest new crop sales of the marketing year.Joe Lardy, at CHS Hedging noted that old crop soybean commitments are now 105.8% of the USDA's forecast for the entire marketing year.August soybeans finished up 3.1% on the day, at $11.74 ¼ a bushel.Wheat bounces back from six-year low The data was, on the face of it, bearish for wheat as well, with acres raised against the March forecast, against analyst expectations.The upgrade was down primarily to heavy spring wheat sowings. Still, wheat stocks were a touch lower than expected, and US weekly wheat exports came in ahead of expectations, at 645,400 tonnesBench-mark Chicago September wheat futures dipped briefly to a six-year low of $4.36 ½ a bushel. But markets recovered some equilibrium, with September Chicago futures ending the day up 0.2%, at $4.45 ½ a bushel, up 0.2% on the day.September spring wheat futures in Minneapolis finished up 0.4%, at $5.07 a bushel.The rally in sugar futures took a breather, falling back from four-year highs in an end-of month profit taking spree.Before the start of the session, Thomas Kujawa at Sucden Financial noted that the expiry of the July contract, as well as a "triple whammy from a fund performance reporting date point of view as its end of month, end of quarter and end of half year".Reuters reports that 1.2m tonnes of sugar were delivered against the July contract, according to market sources.Data uncertainty Ahead of the session, Commerzbank warned that Unica data of Centre South Brazilian crushing in the first half of June, could be bearish."The bi-weekly harvest update due to be published in the next few days, will show whether the rainfall did indeed cause serious delays to sugar cane harvesting and processing in the first half of June," the bank said."If the effects turn out to have been less dramatic, the sugar price could come under pressure as a result of profit-taking."October raw sugar futures in New York settled down 3.2%, at 20.33 cents a pound, after falling back from four-year highs of 21.22 cents.

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