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Evening markets: scarce soybeans steal the show

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Wednesday belonged to soybeans, after the US cut its forecasts for stocks to their lowest since 1977, allowing the crop to avoid the drag of a stronger dollar which depressed other food commodities.

Chicago's July soybeans soared to 12.55 ½ a bushel at one point, the best since September last year, after the US Department of Agriculture cut its estimate of the country's bean inventories to 110m bushels at the close of the marketing year in August.

The revision reflected rising estimates of China's hunger for foreign soybeans and waning hopes for exports from drought-hurt Argentina.

Dollar effect

While the contract had dropped to $12.45 ½ a bushel by 17:30 GMT, up 2 cents on the day, that was better than most other farm commodities managed in the face of a stronger greenback. The euro fell back below $1.40.

"The [USDA] report was friendly or at worst neutral but we are not as strong as expected because the dollar is rallying," Vic Lespinasse, at, said.

A strong greenback makes dollar-denominated commodities more expensive to foreign buyers, so tending to inspire selling pressure.

Corn lost 8.25 cents to $4.35 ¾ a bushel despite the USDA tightening its forecast for 2010 stocks thanks to yield losses in this year's late-planted crop.

Wheat slid 3.2% to $5.94 a bushel for July delivery, with forward contracts doing little better. The US forecast rising global stocks despite troubles to Canadian, Spanish and Ukrainian crops.

European wheats were equally weak despite the dollar's strength. November wheat lost £3.25 to £122.75 a tonne in London and E4.00 to E151.50 a tonne in Paris.

Juice turns sour

Softs were soft to. New York sugar ended 0.51% lower at 15.48 cents a pound, and coffee dropped 0.61% to 130.35 cents a pound.

Orange juice recorded its seventh successive day of decline, dropping 1.6% to 85.15 cents a pound.

Traders said juice's June slide had been accelerated by technical factors, with investors bailing out once it dropped through a 90-cents-a-pound level which was meant to have provided support.

It was left, as has been the recent trend, to cocoa to defy prevailing conditions, adding $6 to $2,794 a tonne for New York's September contract.

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