Soft commodities watch: Wheat price rally pauses
Grains and softs have been largely upbeat today, as traders monitored weather conditions in growing regions in a key period of the year. Cane crops in Brazil were in focus, as crushing is set to begin next month, while favourable planting conditions in the US and Russia pressured the wheat price down from a five-week high.
Wheat futures for delivery in May on the Chicago Board of Trade were down 0.33 percent to $5.216 per bushel as of 14:09 GMT today. The contract reached a five-week high of $5.404 on Monday, but dropped more than two percent in the following session.
Soybean prices have advanced, with May soybeans adding 0.38 percent to $9.854 per bushel. The contract has added about three percent since reaching a five-month bottom of $9.5362 last week.
Meanwhile, corn prices have also inched higher, with futures for settlement in May gaining 0.25 percent to $3.942 per bushel, the highest price in a month.
Weather concerns were the primary drivers of grains movements in Chicago this week, with analysts forecasting dry weather in Russia and the South Plains in the US, with similar conditions projected for the Midwest.
“Mostly rain-free weather in the western Midwest will favour early planting and fieldwork,” weather service MDA said. “From a weather perspective, much of the news around was not so helpful to bulls, with a forecast of drier weather in Argentina, helping harvesting, and some idea of dry weather in the US too as planting starts.”
Sugar advances, cocoa price unchanged
Sugar traded 0.37 percent higher at £365.50 per tonne in London as of 14:32 GMT today. The contract has gained very little since reaching a six-year bottom at £360.20 earlier this month.
“Though adequate inventories should limit upside in the near term, increased concerns over Brazil’s 15/16 production should help put a floor under sugar prices,” Morgan Stanley said in a research note.
Analysts noted that the weakening dollar was due to generate support for dollar-priced commodities, while the focus remains on the fundamentals and Brazil’s South-Central cane crop. A minor drop in output is expected.
Cocoa for May delivery was unchanged at £1,950.00 per tonne in London, while the US contract rose 0.56 percent to $2.787.00.
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