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Evening markets: data upgrades weigh on crops

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Crops remained under the weather on Wednesday as external markets slid and investors looked to higher harvest estimates in next week's US supply and demand report.

"The general atmosphere remains gloomy," Agritel, the French consultancy said.

Shares were again on the decline, on both sides of the Atlantic, thanks in part to disappointing news on US jobs. ADP Employer Services said US companies cut 298,000 jobs last month, nearly 50,000 more than analysts had expected.

Crude traded around opening levels.

'Bearish influence'

Chicago crops were also lower, although not on the scale of losses earlier in the week, nor indeed matching those of palm oil, which closed down 2.5% at 2,245 ringgit a tonne in Kuala Lumpur.

Besides the negative influence from external markets, investors began to look ahead to the US Department of Agriculture's September 11 report which will give updated estimates for American, and global, crop supply and demand.

"Most traders expect the USDA to raise their guesses in this report due to the ongoing very favourable weather over the last month," Vic Lespinasse, at GrainAnalyst.com, said.

"If we don't have an early season ending freeze, it is likely the September report will be larger than the August estimates, and the October numbers will be larger than the September guesses, which would be a major bearish influence on prices long term."

Crop estimates

The latest trade guess from FC Stone, on Tuesday, pegged the US corn crop at 13.0bn bushels, higher than the USDA's 12.8bn bushel guess, and soybean production at 3.27bn bushels, again bigger than Washington forecasts.

Informa Economics will release updated forecasts on Thursday.

Chicago soybeans for September stood 3.75 cents lower at $10.10 ¼ a bushel, in minimal volumes, at 17:00 GMT, while the better traded November contract lost 5.5 cents to $9.50 a bushel.

Corn for September was 0.5 cents lower at $3.11 ¾ a bushel, with the December lot down $3.16 ¾ a bushel.

Cairo calling

The wheat market had the extra input of an Egyptian buying order to digest. The size was good – at 330,000 tonnes, it was the biggest spree from the world's biggest importer for at least a year.

The buying pattern was less good for Chicago, with the US providing only 60,000 tonnes. Egypt's order comprised mainly French wheat, with Russia providing 90,000 tonnes.

Wheat stood 1 cent lower in Chicago at $4.86 ¼ a bushel for December delivery. French November milling wheat closed unchanged at E125.25 a tonne, with London's November feed contract ending down £1.00 at £97.00 a tonne.

Sugar rationed

Among softs, sugar also traded lower amid reports that soaring prices were deterring buyers in India.

The supply squeeze in the world's biggest consuming country has been a major factor behind the rise in sugar prices to a 28-year high in New York and a record high in London.

London white sugar closed down 2.4% at $568.60 a tonne, while New York raw sugar stood 2.3% lower at 23.69 cents a pound in late deals.

Cocoa did better, after farmers said that plantations in parts of Ivory Coast, the world's biggest producing nation, had suffered an outbreak of black pod disease.

London cocoa for December closed up 3.5% at £1,913 a tonne. Its New York equivalent stood 4.0% higher at $2,935 a tonne in late deals.

By Agrimoney.com

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