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Canada frost threat stokes crop fears

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A leading weather service has, in the first significant frost scare to North American crops this season, forecast a freeze in Canada's key growing region this weekend.

The report helped Chicago crop prices continue this week's robust performance.

World Weather is predicting that temperatures could go as low as -2 degrees centigrade in Canada's prairies.

While the forecast is not supported by Canada's official weather service, and the US Midwest looks set for further benign growing conditions, the report reminded investors of the risks facing North America's delayed corn, soybean and wheat crops.

'Serious harm'

The US on Monday said that only 22% of its spring wheat crop was in the silo, one third of the average harvesting rate by this time of year.

The proportion of the corn crop reaching the denting stage was, at 18%, less than half the 43% figure that might be expected, with soybeans behind in pod-setting too.

"Crops in both countries are well behind normal in development so any early freeze could do serious harm," Vic Lespinasse, the GrainAnalyst.com analyst said.

"The market will be sensitive to any significant cold weather threats for weeks to come."

French-based analysis group Agritel said in a report on Thursday that the US corn crop "remains vulnerable to frost, with cultures delayed by between two-to-four weeks".

Soybean rebound continues

In Chicago, corn for September delivery was 1.25 cents higher at $3.21 ¾ a bushel at 06:45 GMT, with the December contract up 1 cent at $3.27 ½ a bushel.

Soybeans for September added 8 cents to $10.98 ½ a bushel, taking their rebound from a low 10 days ago to 12%. November beans were 2.5 cents to the good at $9.99 a bushel.

Wheat lost early gains to stand 0.5 cents lower at $4.78 ¼ a bushel for September, although the December contract added 0.75 cents to $5.07 ½ a bushel, taking its gains since Monday's low to 4.4%.

Earlier, in Kuala Lumpur, palm oil closed the morning session on the Bursa Malaysia Derivatives Exchange down 8 ringgit at 2,349 ringgit per tonne, as traders began to close positions ahead of a long weekend.

By Agrimoney.com

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