Cotton cut its shackles to the economic pulse to prove August’s top ag performer.

Futures in the fibre might have been expected to dip, given its status as an industrial ag, and the mounting worries over recession and rising interest rates.

After all, the S&P share index lost 4.2% over the month, and Brent crude 7.2%, as economic optimism waned.

However, cotton found succour in a sharp downgrade by the US Department of Agriculture to its estimate for this year’s domestic harvest – and a forecast that US supplies will end 2022-23 at their tightest in 98 years.

December cotton futures traded limit-up for three successive sessions in the aftermath, and have held on to most of their gains (although the relative underperformance of the December 2023 lot is another question).

That said, September is already ringing some alarm bells for cotton bulls, with the December contract slipping in opening deals back below its 100-day moving average, which has been a key support line.

Hot coffee

Also in demand was coffee, bubbling up thanks to a cocktail of factors, ranging from firmness in the real, important for ags of which Brazil is a major exporter, to some concerns over frost and dryness in the South American country.

However, also key to a late-month rally was the number of September futures contracts, 1,604 to be exact, still left live on August 23, first notice day – provoking concerns that roasters may be seeking to buy through the exchange, when certified stocks are of course among their lowest of the century.

Cooxupe, Brazil’s largest coffee co-operative, also stoked the rally by reporting that its arabica output had fallen short of expectations.

Meanwhile, robusta coffee futures gained an extra fillip from a squeeze on world exportable supplies – thanks to domestic demand from Brazilian roasters, and an exhaustion of stocks in Vietnam.

Corn vs soybeans

Corn also outperformed, spurred by growing worries over heat and dryness damage to the US crop – concerns which gained currency when the late-month Pro Farmer Crop Tour forecast the harvest well below the level the USDA has pencilled in. Fears for the drought-withered EU crop were hardly a negative either.

However, soybeans – for which the Pro Farmer tour harvest estimate exceeded official expectations, which were themselves based on a record yield of 51.9 bushels per acre – proved one of August’s worst ag performers.

But will September bring better times for soybeans, now that Chinese import demand appears to be picking up, and with corn’s gap to rival feed ingredient soymeal so enlarged?

Stay tuned to GrainPriceNews to find out.