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Evening markets: regulatory burden weighs on crops

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Chicago grains failed to stray too far from opening levels as the prospect of further regulatory clampdowns on index funds continued to sideline many investors.

The day presented some potentially market-moving news. Weekly US export sales data were strong for both corn, at 577,000 tonnes of the old crop and 858,000 tonnes of new crop, and soybeans, at 275,000 tonnes of old crop and 583,000 tonnes of the new.

On the negative side, official data showed a surprise rise in new US claims for unemployment benefits, snuffing out a small rally in New York September crude, which stood $0.42 lower at $72.00 a barrel at 17:00 GMT.

But the Commodity Futures Trading Commission's decision to impose position limits on two Deutsche Bank exchange traded funds and on hedge fund Gresham Investment Management was the talk of the city.

Key questions were what impact a sell-down by the funds might have, and what others might be forced to follow.

Wheat resolute

Ironically, while the CFTC action looks mainly to concern wheat, of which the DB funds are big holders, it was this crop which did the best of the top Chicago crops, in percentage terms. The crop's export sales data were a touch on the light side, at 359,000 tonnes, too.

September wheat added 1.5 cents to $4.67 ½ a bushel, with the December contract up 1.5 cents at $4.95 a bushel.

Then again, the crop remained within an ace of 2009 lows. Indeed, in Paris, benchmark November milling wheat set a contract low, ending down E0.75 at E126.50 a tonne.

Data showing that many UK farmers are hoarding 1.1m tonnes of wheat left over from last year did little to improve sentiment, although London November wheat recovered from early weakness to end up £0.20 at £96.20 a tonne.

Tour findings

Back in Chicago, soybeans were a mixed bunch. The September contract added 3 cents to return to $10 a bushel on the nose, while November lost 1.75 cents to $9.56 ¼ a bushel.

Corn was lower both for old and new crops, with the September lot off 0.75 cents at $3.19 ½ a bushel, and December down 1.75 cents at $3.25 ¾ a bushel.

Overhanging both crops is the ProFarmer tour of Midwest farms, which will on Friday release data on its findings.

Cocoa in demand

Among soft commodities, cocoa remained in demand, if not repeating Wednesday's acrobatics, when a chain of automated purchases sent it soaring $190 a tonne in what brokers said was a minute.

New York's December contract added $32 to $2,910 a tonne, with London cocoa ending £19 higher at £1,851 a tonne.

Sugar, however, had one of its profit-taking days, ending down $1.60 at $555.60 a tonne in London, $18 below its day high.

New York sugar for October lost 2.5% to 22.11 cents a pound.


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