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Evening markets: grains end losing streak

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So much for US Department of Agriculture forecasts.

While the department put modestly bearish figures on US stocks of corn, soybeans and wheat on Thursday, beating analysts' expectations on 2009-10 stocks estimates for all three, market disappointment was limited.

Indeed, corn led crops on something of a turnaround day in Chicago, itself gaining back a fair chunk of the near-9% lost in the month so far, and helping wheat put in its first positive finish of December.

'Weather problems'

Weather was viewed as the spark for the rally, with a blanket of snow stopping the long-delayed Midwest corn harvest once more.

"Corn is still supported by the weather problems," Vic Lespinasse, analyst at GrainAnalyst.com, said.

"There are about 1.5bn bushels left to harvest, and who knows when those will be brought in."

Weekly US export sales were also good for corn, at 848,000 tonnes, as well as soybeans, at 928,000 tonnes, although less for wheat, at 245,000 tonnes.

Funds certainly took the bait, buying 6,000 corn lots with an hour to go, helping the best-traded March lot end 2.5% higher at $3.93 a bushel.

The December contract closed up 2.5% at $3.77 a bushel.

House help

The performance helped wheat make a return to winning ways too, with one grain pulling up the other, and despite the weak export data.

March wheat ended up 1.75 cents at $5.37 a bushel, with the little-trade December lot closing up 2.75 cents at $5.17 ¾ a bushel.

Soybeans were the strugglers, besides what might have appeared some brighter fundamental news, with the US House passing a bill that will extend for one year a $1-a-gallon tax credit on biodiesel .

That, unlike ethanol, is a soybean rather than corn issue, and swallows up an estimated 11% of the US bean crop.

And there was no more heard of rumours that Argentina was poised to cut its tax on soyoil and sunflower oil exports, which it emerged had held down Chicago prices on Wednesday.

Still, January soybeans closed down 1.5 cents at $10.27 a bushel, their lowest finish in three weeks.

Spanish silos

Chicago's grain turnaround wasn't enough to excite European prices, with January wheat ending up £0.10 at £105.15 a tonne in London and E0.25 at E128.00 a tonne in Paris.

Indeed, all other Paris contracts ended lower, the May 2011 one down E1.25 to E144.50 a tonne. And this despite a stable dollar-euro exchange rate.

Europe had some negative news to swallow, such as Egypt's apparent insistence on export tender restrictions which put France at a disadvantage for logistical reasons, and Spain apparently sating its appetite for foreign purchases for now.

"Silos in major grain importer Spain's leading port are full, and expected cargoes of Black sea wheat in December should be enough to keep domestic demand going until spring 2010," Gleadell, the UK grain merchant, said.

"Shipments of 96,000 tonnes of Ukrainian and 45,000 tonnes of Bulgarian and Romanian wheat were due to arrive later this month."

Sugar gains another lump

For cheerier view of the commodities market, investors were better looking at softs, where raw sugar jumped 5.1% to 23.26 cents a pound in New York, for March delivery, the best finish for three weeks.

Continued wet weather in Brazil, the biggest producer, was credited for the jump, which surprised many analysts after a weak close on Wednesday.

David Sadler, at Sucden Financial, said that finish "must have been very dispiriting for the bulls, who have recently kept the media well supplied with forecasts of expected whites [demand] from India, Pakistan, Indonesia and Bangladesh, not to mention loss in production in Centre South Brazil as well as China and India".

In London, white sugar for March ended $21.20 at $621.00 a tonne.

March cocoa, meanwhile, touched £2,277 a tonne, a fresh high since February 1985 for the second contract, settling £1 lower.

By Agrimoney.com

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