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Evening markets: export data gives succour to soy

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Strong export data came to the rescue of soybeans on Thursday, after a harvest of disappointing news had threatened to send prices lower with wheat and corn.

It was a miserable day in many markets, after US jobless data showed the number of Americans claiming unemployment benefit at a fresh high, and Standard & Poor's downgraded its outlook for UK government debt.

London's FTSE 100 share index closed down 2.8%, with New York's Dow Jones off 1.5% at 17:00 GMT.

Oil was also weak, with New York light crude for July sliding 1.7% to $60.97 a barrel. Brent actually slipped back below the $60 mark, off 1.0% at $59.96 a barrel.

It was all too much for palm oil. Bursa Malaysia's benchmark July contract closed 4.0% lower at 2,499 ringgit a tonne.

'Huge export demand'

However, palm's partner in vegetable oil making - the soybean – recovered from early lows after official data showed brisk US export sales of 701,000 tonnes for the current crop year and 667,000 tonnes for the next.

"Behind the rally in beans is the ongoing huge export demand, reflected in this morning's weekly export sales report for beans, which was much larger than trade estimates," Vic Lespinasse at GrainAnalyst.com said.

"Funds have been buying bean futures as quickly as China has been buying beans in the cash market, pushing open interest in beans up by about 50% since the beginning of the year to almost 430,000 lots."

Soybeans for July, Chicago's most traded contract, added 3.5 cents to $11.72 ½ a bushel which, if it can hold this level until close, would be the highest finish for a leading contract since September 25.

Forward delivery beans were also higher, with the August contract adding 4.5 cents to $11.34 a bushel and November 3.75 cents up at $10.18 ¼ a bushel

Wheat slips

Nonetheless, better-than-expected exports failed to help wheat back to positive ground.

The US Department of Agriculture data showed that, while weekly export sales for this year's crop had slowed to a miserly 20,200 tonnes, demand for next year's was a buoyant 543,000 tonnes, way above forecasts.

However, weather forecasts showed better planting weather for farmers still trying to get their spring crop in the ground, reducing the chance of a slim harvest.

Chicago's May contract was 3.5 cents lower at $594 ¼ a bushel, with December slipping 4.5 cents to $642 ¼ a bushel.

London wheat was down too, off £1.75 at £120.25 a tonne for July, hurt by a strengthening pound to boot.

Paris wheat, at least, managed a more mixed performance, with the August contract unchanged, November adding E0.50 to E156.75 a tonne and May 2010 losing E0.75 to E160.50 a tonne.

Pigs sink

Corn lacked support from either strong exports or a dismal planting outlook, and eased 0.25 cents to $4.25 ¾ a bushel for July delivery, with September corn slipping 0.5 cents to $4.35 a bushel.

Elsewhere, hogs were noticeably weak, slipping 1.8% as traders prepared for the post-Memorial Day dip in pork demand.

Lean hogs for June lost 1.8% to 65.30 cents a pound, with the July contract slipping 2.1% to 57.00 cents a pound.

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