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Morning markets: Argentine rains dampen corn, soy markets

Again, share investors had something to celebrate as 2013 nears a close.

Tokyo's Nikkei share index rose 0.7% on its last trading session of the year to close at its highest level in six years, helped by weakness in the yen, which boosts prospects for Japan's important export sector.

However, for agricultural commodity investors, it was those with short positions who were more comfortable, as rains eased concerns over dryness and hot weather in Argentina, a major producer and exporter of corn and soybeans.

Crop conditions are now improving in Argentina, as well as Brazil, MDA said, noting showers in northern and central Cordoba, southern Santiago del Estero, northern La Pampa, Entre Rios, central and southern Santa Fe.

"Amounts were 0.25-1.0 inches, locally up to 2.5 inches with 40% coverage of corn/soybean crops," the US-based weather service said.

"Cooler temperatures and rainfall this week will help improve crop conditions," although "some dryness is likely to continue in central and southern Buenos Aires".

'Significant rains and thunderstorms' noted that temperatures hit 108 degrees Fahrenheit (41 Celsius) in some areas on Saturday, and 95 degrees Fahrenheit in Paraguay too.

However, "there were several areas of significant rains and thunderstorms Saturday night into Sunday", of 0.5-2.0 inches, the weather service said.

And as for the outlook, "the weather models are in pretty good agreement that over the next five days there will be significant showers and thunderstorms over all of central and northern Argentina".

'Stay tuned'

South American weather concern is not the only card that bulls have been playing with, for instance, weekly US export sales data released on Friday coming in at higher than expected levels for soybeans, wheat and, especially, corn.

Corn sales came in at 1.48m tonnes for 2013-14 and 509,000 tonnes for next season.

But it has been an important factor, and the idea of improved growing conditions sent Chicago soybeans for March down 0.4% to $13.08 a bushel as of 08:20 UK time (02:20 Chicago time).

A drop in Dalian soybean prices overnight by 1.5% to 4,412 yuan a tonne was of little help, signalling potentially negative implications from talk of reforms to Chinese agriculture policy.

CHS Hedging flagged reports of China "instituting direct payments to farmers versus the previous practice of stockpiling grains.

"Stay tuned to this one," the broker advised.

Chicago corn for March was 0.4% lower at $4.26 a bushel.

Palm gains

Rain was a, more bullish factor, in the palm oil market, where ideas of heavy storms in Sarawak helped the benchmark March contract added 0.3% to 2,639 ringgit a tonne.

Malaysia's Meteorological Department has issued "orange" and "yellow" stage alerts over parts of Sarawak, responsible for more than 15% of domestic palm production, cautioning that heavy rains could cause flash floods.

Palm oil prices have also been taking solace in a weakening ringgit, which has boosted the competitiveness of Malaysia's exports, although the exchange rate appears to have stabilised for now at about 3.29 ringgit to $1.

'Snow cover continues to decrease'

Back in Chicago, there are some concerns emerging among wheat investors over Russian weather, and a thinning snow blanket which could leave seedlings vulnerable to winterkill.

"Snow cover continues to decrease across southern and western wheat areas," MDA said.

Broker CHS Hedging said: "Former Soviet Union wheat weather has crawled onto some folk's weather radars. Stay tuned."

However, such concerns were not sufficient to prevent wheat for March shedding 0.3% to $6.07 a bushel, if staying well above Thursday's 19-month low of $6.00 a bushel.

Evening markets: large US exports lift grain, soybean prices
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