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Evening markets: crops dodge market mayhem

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Commodities traded little changed despite the mayhem in other markets, as fears over a default by Dubai sent shares plunging and the dollar soaring.

The day witnessed a typical flight-to-safety play, with the dollar jumping more than 1% against the euro, which fell from $1.5141 to stand at $1.5008 at 18:45 GMT.

Meanwhile, stocks slumped, with London and Frankfurt stocks ending the day down more than 3%.

And oil slid 2.2% to $76.23 a barrel.

Lack of a lead

But the absence of a lead from the US, where markets were closed for the Thanksgiving holiday, left farm commodity markets relatively unmoved.

Grains were mixed, with sliding sterling – which suffered in particular from fears that UK banks were exposed to Dubai – helping January London wheat tick £0.10 higher to £107.60 a tonne, the best close for a spot contract for four months. A weak pound makes UK exports more competitive.

There was no such luck in Paris, where grain reacted to the general market fear rather than the weaker euro, ending down E2.25 at E131.00 a tonne for January delivery.

February rapeseed, meanwhile, lost E1.25 to E280.50 a tonne.

Crude's fall was of little help to the oilseed. Nor was Kuala Lumpur palm oil, which ended flat at 2,482 ringgit a tonne after being 1.6% higher earlier.

'Technically strong'

For softs, similarly, prospects did not look good, given the stronger dollar and flight to safety. Even in Europe, most softs are traded in dollars.

London robusta coffee beans took some fright, ending down $9 at $1,331 a tonne for January, with reports of a decent Vietnamese harvest also weighing. Vietnam is the biggest producer of the beans.

But sugar remained in favour, adding $4.40 to $608.40 a tonne amid continuing concerns for output in top producer Brazil, where the harvest has been hit by rains.

And cocoa, which is traded in sterling, was helped by the weak pound to close up £5 at £2,180 a tonne for March delivery, amid concerns as to how long an uptick in Ivory Coast output can last.

"Despite the healthy Ivory Coast arrivals figures, concerns as to the total of the current main crop and the development of the mid-crop in Ivory Coast continues to underpin prices in what continues to be a technically strong market," Stephanie Garner at Sucden Financial said.


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