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Evening markets: crops' revival proves a blip

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Crops, once again, managed to avoid bullish signals from external markets, putting only a temporary claim on positive territory.

Shares and oil managed to beat off early blues after the second large Shanghai slide in three days brought the market's losses in two weeks to 20%, signalling a bear market.

Bargain-hunting revived equities, with crude soaring 3.6% in New York at 16:50 GMT thanks to the added bonus of an unexpected drop of 8.4m barrels in US oil inventories. Analysts had expected a rise.

The US dollar weakened too, usually a good sign for exports such as farm products.

Sudden sell off

But Chicago crops managed only a temporary claim on the high ground.

"Wheat suddenly sold off this afternoon after spending most of the morning higher," Vic Lespinasse at GrainAnalyst.com said.

The slip was blamed by some on talk of regulatory limits being put in place by the the Commodity Futures Trading Commission.

"I don't know if this is the real reason for this sell off or not but there might be a connection," Mr Lespinasse added.

East vs west

The market had appeared to take in its stride the latest data from the ProFarmer tour of Midwest crops, which showed mixed yields.

The tour was showing crop condition "much better in the west than in the east", Vic Lespinasse at GrainAnalyst.com said.

"For example, Nebraska corn yields were estimated at almost 159 bushels per acre, way above the 3 year tour average of 141.5 bushels per acre.

"But Indiana corn yields were put at 157.3 bushels per acre, only modestly above the three year average of 154.1 bushels per acre.

September corn stood 1 cent higher at $3.15 ½ a bushel, off a high of $3.21 ¾ a bushel, with the better-traded December contract up 0.225 cents at $3.22 ¾ a bushel.

Ukraine harvest

Soybeans were under pressure too, down 3.5 cents to $9.92 a bushel for September and 5.25 cents to $9.53 ¾ a bushel for the November contract.

Even confirmation of a Chinese purchase of 205,000 tonnes of US beans – the third big order in as many days – failed to shrug of lingering concerns that supplies may not be as tight as had been thought, following poor US crush data at the end of last week.

Meanwhile, wheat dropped 1.25 cents to $4.69 ¼ a bushel for September and the same to $4.97 a bushel for the December contract, which hit $5.08 a bushel earlier.

Ukraine's report of a better grain harvest may not have helped, fuelling further expectations of a bumper world crop, on top of plentiful supplies.

Indeed, markets in Ukraine's nearer-neighbours in Europe were affected even before Chicago's contracts took a turn for the worse.

London wheat for November closed down £0.25 at £96.00 a tonne, with the Paris November milling wheat contract down E1.00 at E127.25.

By Agrimoney.com

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