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Evening markets: farm commodities defy market slump - a bit

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It could have been worse.

The average commodity lost 0.8% on Tuesday, according to the CRB index. And


were basket cases again as fears for the world economy spread. London stocks tumbled 2.6% and Frankfurt ones 3.0%, with Wall Street shares down 1.6% in late deals.



fell below $100 a barrel for only the second time since February.

But many agricultural commodities fared far better, with some even recording positive closes.

Rain on the Plains

There were exceptions, of course, notably


, which tumbled 2.5% in Chicago to $6.04 a bushel for December, the lowest finish for a spot contract for four months.

Hard red winter wheat areas, where many sowings have been delayed because of drought, are "expected to get rain in the one-to-five day forecast on about 55% of the area. In the six-to-10 day forecast, about 66% of the area will receive rain", US Commodities said.

That was a depressant for European prices too, with Paris wheat for November finishing down 1.7% at E182.25 a tonne, a 14-month closing low for a spot contract.

London wheat for November set the same record by dropping 1.3% to £146.10 a tonne.

'Much larger yields'


fell too in Chicago, despite what looked a hefty support to prices after Statistics Canada cut its estimate for the Canadian crop of rival oilseed


by 300,000 tonnes to 12.9m tonnes.

Some analysts had expected a 1m-tonne upgrade, to 14.2m tonnes.

The trouble was that the US soybean crop looks like getting an upgrade, and potentially of a lot more than 300,000 tonnes.

"Harvest yields continue to be larger than expected on both corn and soybeans. In some cases, soybeans are much larger," US Commodities said.

'Struggling mightily'

At rival broker Country Futures, Darrell Holaday said: "Yield projections for corn and soybeans are starting to climb as actual yields come in.

"This is especially true of soybean yields. This is why that market is struggling mightily."

Soybeans for November closed down 2.0% at $11.60 a bushel in Chicago, a 2011 low for a spot contract.

That put a dampener on canola, which ended down 1.1% at Can$518.50 a tonne in Winnipeg, for November delivery, while Paris


for the same month dropped 1.2% to E422.00 a tonne.

Chinese import boom?



managed to recover some losses to finish at $5.87 ¾ a bushel for December, down 0.8% - sure a 2011 closing low, but ending nearer its high of the day than the low.

And the lot traded a so-called "inside day" too, meaning its trading range stayed within that of the day before, something it has not done for a month. The grain's rout had at least paused for breath.

The relative resilience was attributed to ideas of end-user demand at these levels, stoked by a forecast from the US Grains Council that China will import some 5m-10m tonnes of the grain in 2011-12, if not all from America.

Softs harden

And, in New York,


managed a 2.7% leap to 101.87 cents a pound for December delivery, with buying for the fibre kicking in again when it strayed too far below 100 cents a pound.

A warning from the International Cotton Advisory Committee over the drought-hit US crop, saying the US Department of Agriculture estimate was 200,000 tonnes too big, did little to damage sentiment.



added 1.4% to 226.55 cent a pound in New York, for December delivery, after finding support around a key technical support level at some 222 cents a pound.

That marks the 50% retracement of the bean's rally which peaked in May, a key level for some chart technicians.


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