LONDON (Commodity Online): The agricultural commodities complex posted price declines on the day. Profit-taking after recent gains saw grains prices easing. Front month CBOT Corn prices managed to close higher on the day at $7.32/bushel, while the new crop December contract hit a new contract high before closing at $7.43/bushel.
CBOT Wheat posted the steepest fall, with front month prices shedding 8 cents on the day, at $7.49/bushel.Soybean prices posted more modest declines. Prices are weaker in early trade this morning. However, the outlook for the grains complex remains positive in our view, with recent results from crop scout tours in the US Midwest revealing poor yield conditions.
Meanwhile, latest weekly EIA data yesterday showed that in the week ending 19 August, US Ethanol production rose by 5Kbpd to 904Kbpd. ICE Sugar prices posted the largest fall, of 2.1% to close at 30.2 cents/lb. Prices have fallen further in early trade this morning, to 28.9 cents/lb.
In the near term, we expect prices to be supported in Q3 on supply downgrades from Brazil but for prices to ease through Q4 and into early next year. However, prices and sentiment are likely to remain choppy, swinging between the implications of a weak Brazilian crop on the one hand and robust supply growth across other key producers on the other.