October broke the solidarity among agriculture’s industrial commodities.

Often ags used largely for non-food uses, such as making biofuels or clothing, move in tandem.

This happened for instance during the height of the Covid crisis, when the likes of cotton and soyoil much underperformed, say, wheat and oats as economic sentiment tanked.

With economic gloom a feature again, it was no surprise that cotton futures struggled in October, registering as the worst performer of the GrainPriceNews table for a second successive month.

Palm up

What was more unusual, against this backdrop, was that vegetable oils, which in being used largely in making biodiesel also tend to move to the economic beat, proved the best performers.

Kuala Lumpur palm oil, with an 18.7% price surge, was the biggest gainer. (And this for a month when the dollar was relatively stable, meaning that ringgit softness played only a small role in palm’s gains.)

Soyoil and canola, the source of canola oil, were the second and third best performers, with rapeseed not far behind.

Bullish cocktail

That looks down to a number of factors.

It was some support that oil prices in fact rose last month, helped by the 2m-barrels-per-day output cut enacted by Opec+ producers. Brent crude added 5.5%.

Palm oil was also helped by the continued rundown in Indonesia’s stocks, which has been a big cloud over the market, besides by data showing strong imports by India.

Also to factor in was that October, unlike September, did not see a spree of soybean selling by Argentine farmers, after the end of the “soy dollar” window offering them an improved exchange rate on their sales of the oilseed.

Soybeans themselves were the best performer among Chicago’s big three contracts.

And vegetable oils ended the month strongly, thanks to the threat to supplies of sunflower oil from top shipper Ukraine after Russia pulled out of the Black Sea grain export deal.

Coffee drops

By contrast, supply dynamics were less supportive to the likes of whole milk powder.

Although New Zealand’s milk production has got off to its worst start in five years, vital signs are improving in the European Union and the US. This when there remain worries over demand from top importer China.

Coffee cooled as rains refreshed Brazilian plantations, meaning a strong flowering period, and a promising start for the 2023 crop cycle.

Arabica prices suffered particularly, in part thanks to demand factors too, with the bean used more in coffee shop offerings, consumption of which is seen more exposed to economic woes than the at-home blends which focus on robusta beans.