Rally? What rally?
While US ag markets rested at improved levels (after rising strongly in the run up to today’s Independence Day holiday) the limelight switched to Asian peers, which struggled to maintain the positive trend.
Corn vs barley
Indeed, on China’s Dalian exchange, corn futures for September eased by 0.4% to 1,681 yuan a tonne, a far cry from the 1.1% gain in their Chicago peers in the last session.
That said they remain at elevated levels, well above the contract low of 1,400 yuan a tonne set in September, and with the rebound in Chinese prices spurring talk of consumers turning back to importing the likes of barley and sorghum as alternative feed grains.
In fact, Chinese barley imports for the first five months of this year, at 3.89m tonnes, are up 128% year on year.
Corn imports, meanwhile, at 352,159 tonnes, are down 88%, and those of distillers’ grains (DDGs) the corn-derived feed ingredient which is (for US supplies) the subject of Chinese anti-dumping tariffs, down 77% at 302,809 tonnes.
Much-needed rains
Chinese corn prices are also feeling pressure from an easing in dry conditions in the key North East growing region.
This week, “rains should continue to improve moisture across North East China, central Yangtze Valley, and eastern North China Plain,” said MDA.
The precipitation will help both “corn and soybeans, and additional improvements are expected in these areas… next week”.
Dalian soybean futures, it has to be said, did manage a 0.3% gain to 3,908 yuan a tonne for September, taking some lead from their Chicago peers, which for August added 2.4% in the last session.
With China the top soybean importer, domestic values of the oilseed tend to be more vulnerable than those of corn to moves in international markets.
Palm down
However, the strength did not spread elsewhere in the oilseeds complex to palm oil, which on the Dalian dropped 0.7% to 5,296 yuan a tonne for September delivery.
Indeed, vegetable oils overall did not have such a good day, with soyoil for September shedding 0.6% to 5.964 yuan a tonne.
The declines in prices in a major palm-importing country infected palm oil futures too in exporter Malaysia, where Kuala Lumpur’s September lot shed 0.2% to 2,497 ringgit a tonne as of 09:50 UK time (03:50 Chicago time).
This reversed a little of the headway in the last session, when Kuala Lumpur palm oil futures rose in reaction to Friday’s US Department of Agriculture data showing US stocks and sowings of soybeans (the source of soyoil) below market expectations.
Oriental Pacific Futures overnight flagged talk that palm price gains “are not likely to sustain as exports remain weak after the Ramadan and Eid-Al-Fitr festivities”.
Meanwhile, Malaysian palm oil production is amid a seasonal rise to a peak typically around September.
Rubber drops
Back in China, rubber suffered a particularly big decline, dropping 2.9% to 13,055 yuan a tonne for September in Shanghai, reversing much of the recovery in the past 10 days or do.
The drop followed data showing that Chinese automobile production fell by 2.4% month on month in May to 2.08m vehicles.
Sales, at 2.09m units, were up 0.6% from April, but down 0.1% year on year.
A stalling in the recovery in crude oil (the source of synthetic rubber) hardly helped, with Brent crude down 0.4% at $49.47 a barrel, struggling to get back through the psychologically-important $50-a-barrel mark.
Tokyo rubber fell too, by 0.6% to 194.90 yen a kilogramme for the benchmark December contract.
