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Evening markets: crops slip as frost doubts set in

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Crops' decline accelerated in live Chicago trading, with corn giving back most of Tuesday's gains, weighed down by farmer selling as well as doubts as to the freeze prospects behind the jump in prices in the last session.

The dollar provided some support by continuing to weaken, setting a fresh one-year low against the euro, and so making US exports cheaper.

Oil did its best too, recovering from early weakness to stand 1.1% higher at $71.74 a barrel for New York light crude, October delivery, at 16:30 GMT.

But on agricultural markets, traders' doubts grew that Tuesday's rally had been overdone. Farmers certainly saw it as a selling opportunity, driving cash prices sharply below futures prices.

"At least one case (Cedar Rapids, Iowa) the cash bid for beans fell just over $1 a bushel, to 32 cents under the November futures price," Vic Lespinasse, analyst, said.

'Widespread frost event'

Meanwhile, debate continued about the likelihood of frost.

At Hightower, Tim Hannagan, quoting, talked of temperatures potentially dropping to 32 degrees Fahrenheit (zero centigrade) or below in the middle of next week in the Upper Plains states and some parts of the Midwest.

"This certainly suggests a wide spread frost event over several days," he said.

"A frost next week would change the psychology... from prospects for a larger October [US Department of Agriculture] crop estimate to talk of how much will the USDA cut production."

Vulnerable crops

However, Mr Lespinasse said: "Many weather forecasters this am think freezing temps probably won't extend as far south, and therefore not do as much damage to corn and beans, as feared by the market yesterday."

This year's US corn and soybean crops are viewed as particularly vulnerable because of their late development, reflecting late plantings.

Corn for December slumped 20.25 cents, or 5.8%, to $3.26 ¼ a bushel, with November soybeans down 30 cents, or 3.1%, at $9.30 a bushel.

Wheat, for harvesting is approaching the last chapter, was 2.5% lower at $4.58 ¾ a bushel for December delivery.

In Paris, it closed down E1.75 at E119.50 a tonne, and in London by £0.75 at £92.50 a tonne.

Sugar sweetens

A better crop for bulls was sugar, which resumed its advance, jumping 4.2% to 22.70 cents a pound for New York's October contract, helped by news that Indonesia was allowing refiners to import extra sugar to boost stocks.

The measure, aimed at quelling soaring domestic prices, comes amid a market squeeze provoked by weak Indian production and a rain-hampered Brazilian harvest.

London white sugar for December closed up 3.3% at $591.60 a tonne.

Cocoa ended flat at $1,983 a tonne in London, but not before setting a contract high of $2,011 a tonne.

New York cocoa closed down $8 at $3,086 a tonne.


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