The weekly Rabobank Commitment of Traders Report showed managed money increased its net long position in agricultural commodities for a second week in a row - net long positions are at a four-week high.
■ Bearish sentiment to weigh on global Wheat markets this week with beneficial European rains over the week compounding the Russian government’s announcement on 28 May not to extend its export ban beyond the end of June.
■ The planting pace of most US Soyabeans spring crops remains behind schedule which, in our view, will result in the most bullish scenario for Chicago Board of Trade corn prices.
■ Palm Oil prices will likely see further downward pressure in the short-term due to a broader weakness in the oils complex and a lack of new fundamental news. We expect this to be short-lived as China and India increase imports in coming weeks as global vegetable oil availability declines.
■ Sugar prices have been well supported in the past month by strong spot white demand, lower Brazilian output, concerns about Thai port delays and an early monsoon lowering 2010/11 output potential from India. However, upside movement should be limited by the expectations of better availability of supply.
■ Coffee prices have been bouncing sideways since mid-May as speculators have liquidated long positions while end users were buyers. Prices look vulnerable to further downside if roaster buying slows.
■ Barring any negative weather impacts, Cocoa prices in the short-term will likely continue to ease, but the longer term fundamental outlook is bullish due to the forecast supply deficit.
