By Yusuf Khan
Roundup of major agricultural commodity markets for the week of August 8-12 by Dow Jones Newswires in London.
CEREALS & OILSEEDS
Attention at the beginning of this week is still focused on the grain deal between Ukraine and Russia, with the highest number of vessels leaving the country and heading to different destinations around the world.
Question marks remain over the availability and insurance of ships, but for now the smooth passage of ships is helping to allay some fears. “Shipping is of course [not] the only constraint – harvesting and transfer to port are also hampered,” Commonwealth Bank of Australia’s Tobin Gorey said in a note.
That said, the dry weather in Europe continues to support grain markets. “The United States had better rains last week, but the Western Corn Belt is still too dry,” Peak Trading Research said in a note. “Europe is also experiencing drought conditions. This is a critical production window for soybeans,” he added.
Gorey also noted that investors have started buying Chicago wheat futures again. “Investors’ long positions are still small but they have clearly stopped selling over the past month.”
Later this week, WASDE global production figures for agricultural markets will be released. Peak added that “the US Department of Agriculture could significantly lower EU corn estimates.”
Chicago wheat futures are down 0.7% at $7.70 a bushel on Monday. Corn was down 0.5% at $6.07 a bushel.
SOFT RAW MATERIALS
Sugar prices are the main focus for commodities this week after gaining 1.3% the previous week on a falling US dollar.
Part of this is also due to “excessive heat in large parts of Europe, which created the risk of lower beet yields,” Rabobank said in a note. Commonwealth Bank of Australia’s Mr Gorey said ‘too modest a flow of Indian white exports’ could be another factor driving up prices and ‘created concerns that some contracts might not be full”.
New York coffee prices were up 2.3% at $2.14 a pound on Monday, raw sugar was down 0.4% at $0.18 a pound while cocoa was up 0, 5% to $1,781 per metric ton.
Write to Yusuf Khan at [email protected]
