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Evening markets: bear break sends wheat down 4%

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Chicago wheat's rally came off the rails as some scraps of bearish data, coupled with weaker corn, proved sufficient to return the grain to the back foot.

Brussels was responsible for two pieces of unhelpful data. One came Coceral, the grains lobby group, which raised its forecast for European production to nearly 140m tonnes, above the US Department of Average.

That might not be such an issue if it were not for the fact that Europe's position on export markets appears to be improving, with the European Union announcing 462,000 tonnes of weekly wheat export licences.

"The European export figures appear encouraging as they show a clear increase compared to last week's disappointing numbers," French analysis group Agritel said.

Pressure tells

With concerns for regulatory tinkering in the US also returning, and thought currently to favour prices of later contracts over near-term, and corn sagging on the absence of frost forecasts, bears this time succeeded in getting wheat lower.

Profit-taking from this week's rally added to selling pressure.

The December contract stood 4.0% lower at $4.54 ½ a bushel at 18:00 GMT.

However, they were still having trouble driving it to a contract low, currently at $4.50 a bushel, with the lot bouncing off $4.50 ¾ a bushel this time.

December corn, meanwhile, slid 1.0% to $3.33 a bushel in line with waning frost fears.

November soybeans held up, adding 2.5 cents to $9.22 a bushel, although this was attributed by traders to short-covering ahead of the weekend.

Ton a tonne

The selling trend weakened in its journey across the Atlantic, with European markets supported by some extent by the EU export data.

Paris wheat for November closed down E1.25 at E122.50 a tonne, with London wheat ending unchanged at £99.00 a tonne.

Earlier, it went above £100 a tonne for the first time since the end of August, helped by weaker sterling, which earlier dropped to E1.0848 against the euro as investors continued to react to the approval of UK central bank head Mervyn King of a weaker currency which would boost exports.


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