- THE USDA QUARTERLY GRAINS STOCKS SUMMARY WILL BE RELEASED ON FRIDAY SEPTEMBER 30TH AT 12PM EST.
- HEDGE FUNDS WON‘T LOSE THEIR TASTE FOR SUGAR FUTURES ANY TIME SOON
Rabobank unveiled a hefty upward revision to its sugar price outlook, after the recent rally. And the bank expected prices to stay near their current levels, as hedge funds hold onto their speculative long positions, in hope of a tightening market. “An impressive rally in sugar prices, followed by slowly declining implied volatility, forces us to adjust our forecast upwards,” Rabobank said. According to US regulatory data, speculators are now holding a record-large long position in raw sugar prices. And Rabobank said that speculators were not going to be winding up those bullish bets any time soon, as they wait for fresh bullish developments. “We have held the view over the last few months that funds are looking for two distinctive bull events,” the bank said. The first of this is a fall in the global cane crop, and the second is the opening of India to sugar imports, which is expected in the middle of next year. “Therefore, a quick exit of funds is unlikely,” Rabobank said. - RUSSIA HAS ‘GOOD MOISTURE‘ FOR WHEAT, SOVECON SAYS
Russia is seeing good moisture levels for winter crop sowings said Andrey Sizov Jr of the influential Moscow-based analysis group SovEcon. This week the European Commission flagged “concern” about dry weather in parts of Russia, which could harm winter wheat prospects. But speaking to reporters, Mr Sizov was upbeat about winter wheat prospects.
Summary:
Midwest weather conditions are mostly cooperating for harvest activity this week, although the 6-10 outlook suggests a wetter pattern for next week. After sliding for the past three days the grains took a bit of a breather today moving up 3 cents for Corn, 7.75 for Beans and 8 cents for Wheat. The Corn Crop harvest progress was reported at 15% complete per yesterday’s report. If the weather operates as projected this week the progress can make some significant gains ahead of the next report. Corn has remained in a low volatility trading range from about 327 to 343 for the three weeks or so and has yet to post a strong break to the downside that compels producers to start selling with conviction. Futures prices should continue to move sideways to down for the next few weeks.
Beans closed higher today on the prospect of renewed demand. Export sales numbers showed that 120k tons of new crop Beans were sold to China. As suggested yesterday in our newsletter prices breached the September 1 low. We also cautioned traders to be careful near 937 because that was a reasonable area for Speculative traders to cover shorts. The close today was only a penny off the intraday high.
Wheat futures came alive today at the dawn of our September 27 cycle date. December Wheat led the way in both price and percent change gaining 8 cents (2.02%). The export sales numbers from yesterday perhaps contributed to the strength that was seen today. If demand proves to be strong and consistent then our initial upside projection for Wheat may come to fruition after all.
