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Evening markets: profit takers trip up wheat

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Profit taking stole the wind from wheat's sails on Tuesday, although soybeans remained on the winners' list, helped by a recovery in oil.

New York crude recovered from $59.53 a barrel to $61.51 by 16:30 GMT, with European and US equities posting sharp gains, after a Conference Board report showed American consumer confidence at its highest since September last year.

That helped Chicago soybeans for July extend gains, adding 9.5 cents to $11.75 ½ a bushel – and raising hopes it would cross back over the much-watched $12 a bushel mark much quicker than the last time.

The first time soybeans crossed $12 a bushel - briefly in June 1973, following frost damage to the US crop - investors had to wait until September 2008 for it to climb back over.

Palm oil did its bit on Tuesday too. While Bursa Malaysia's benchmark August contract ended down 15 ringgit at 2,430 ringgit a tonne, it had looked much worse before talk of a production squeeze filtered back in.

The contract earlier touched a five week-low of 2,350 ringgit a tonne.

Past its peak

Wheat, however, had no such luck, climbing to a four-month high only to slip back on profit taking encouraged by a stronger dollar.

July wheat was 3.25 cents to the bad at $609 ¼ a bushel, with forward contracts declining a similar amount.

European contracts followed, despite concerns continuing to mount about dry weather in Eastern Europe, Russia, Spain and the UK.

London wheat for July lost £1.00 to £121.00 a tonne, with its Paris counterpart slipping E4.00 to E149.00 a tonne, although forward contracts fared a little better. May 2010 lost E2.50 to stay half a euro above the E160 a tonne mark.

Rapeseed lost ground too, off E3.50 at E315.25 a tonne for August, undermined by comments from China's Agriculture Minister that the country will harvest a record crop this year.

Disappointing exports

Back in Chicago, corn also felt the pressure of the dollar, slipping 5.5 cents to $4.24 ¾ a bushel for July and similar amounts for forward contracts.

Weak US export inspections data didn't help. While corn's 27.5m tonne figure was bigger than those for both wheat and soybeans, it fell below traders' expectations.

All eyes will be awaiting the US crop progress report due later.

Investors get windy

Among softs, orange juice put in a steady performance, adding 0.6 cents to 92.30 cents a pound for New York's July contract.

Hurricane hype, with the Gulf of Mexico storm season approaching, was credited for some of the gain, with buying by funds spreading their weight around food commodities.

There was no such luck for cocoa, however, despite reports of a 13% fall in of beans had arrived at ports in the Ivory Coast, the world's biggest producer.

London cocoa for July ended £7 lower at £1,604 a tonne, with its New York twin settling down $13 at $2,407 a tonne.

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