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Evening markets: cotton and soybeans losers of a mixed day

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The safe haven of the


eased from early highs, and


markets improved as the day wore on (if still barely ecstatic), amid growing hopes for a Greek government which will undertake austerity measures need to win EU approval.

So while Italy's debt problem still gave investors reason to worry, the default position for risk assets was to improve from morning lows.

Which was pretty much what happened in many commodities, including Brent


, which accelerated from a slow start to post gains of 2.4% in late deals, topping $114 a barrel.

In Chicago, corn recovered some ground to close at $6.53 ¼ a bushel for December delivery, down 0.4% on the day, while December wheat made it back into positive territory, closing up 0.3% at $6.38 ¾ a bushel.

'Real weather concern'

Wheat was helped by ever-growing concerns for Ukrainian winter grains, which remains dry such that 30% of these plantings could be lost, the country's official meteorological centre said.

"Dryness in the Ukraine area is supporting the wheat values this morning," Darrell Holaday at Country Futures said.

GrainAnalyst trader Matthew Pierce said: "The real weather concern right now revolves around Ukraine," adding that some of the hopes of rain for the drought-beset US southern Plains, home of hard red winter wheat, may have been overdone too.

"There is not much help seen for Texas during the current system," with rains forecast in the eight-to-14 day outlook showing "the rest of the country will get a good drink while Oklahoma and Texas are left out again".

Hard red winter wheat, traded in Kansas, closed up 0.9% at $7.24 ½ a bushel for December delivery.

High Brazilian hopes

Corn was hardly helped by a forecast from consultancy Celeres that the Brazilian crop would hit 63.14m tonnes, a rise of 17.5% year on year, and 2.1m tonnes above the US Department of Agriculture forecast.

However, it was


which really bore the brunt of strong South American prospects, with Chicago's January lot falling 1.6% to $12.01 ¾ a bushel, and the expiring November lot shedding 1.7% to $11.92 ¼ a bushel, its lowest close in nearly a month.

A Celeres upgrade of 320,000 tonnes, to 75.5m tonnes, in its forecast for the Brazilian harvest was one headwind.

Weather was another.

"The weakness in the soybeans can be tied somewhat to increased rainfall over the weekend in South America," Mr Holaday said.

'Very low export pace'

And this against a backdrop of persistent fears for US exports of the oilseed, which have been denied their usual strength at this time of year by a long tail to the South American shipment season, following strong harvests early this year.

"The recent pace of [US export] sales has been very low," said Darrel Good, agricultural economist at the University of Illinois.

"To reach the USDA projection for the year, new sales will need to average 15.5m bushels per week from November through August 2012. For the two weeks ended October 27, new sales averaged only 8m bushels per week."

In fact weekly exports themselves, as measured by cargo inspections, were not too bad for the week to Thursday, at 49.2m bushels, in line with those the previous two weeks, if down from the 62.6m bushels in the same week a year before.

Mixed performances

Elsewhere, European grains were mixed, with Paris wheat for November adding 0.3% to E196.00 a tonne while January wheat shed 0.4% to E186.25 a tonne.

London wheat for May, the best-traded lot, edged 0.1% lower to £154.75 a tonne.

And a mixed performance covered soft commodities too, with weak deliveries in Ivory Coast supporting


, which added 1.2% to $1,698 a tonne in New York for December delivery.

Furthermore, there has been something of a trend by speculators to cover positions, with their net short having approached historic highs last month.

'Cotton has lost'



too, speculators are amongst their more bearish of recent years, with a net long cut to less than 7,100 lots, according to latest US regulatory data.

And this against a backdrop of lingering production concerns in countries such as Colombia, with Indonesia potentially facing a second season of La Nina doused production.

Coffee for December delivery added 1.2% to 233.0 cents a pound.



for December dropped 2.0% to 96.76 cents a pound, a 14-month closing low for a spot contract, on a decline exacerbated by rolling by funds from the near lot to the further away contracts, to avoid getting entangled in the expiry process.

The March contract fell 1.6% to 96.88 cents a pound – gaining a premium over the December contract, indeed.

"Cotton has lost and demand for US cotton doesn't look as though it will improve anytime soon," soft commodities trader Jurgens Bauer said.


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