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Evening markets: senate heat adds to market fears

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Potential US curbs on commodity investors emerged as a fresh reason to get bearish on Chicago grains, on top of weaker oil, a stronger dollar and farmer-friendly weather.

The dollar dipped below $1.40 against the euro as traders awaited a statement from the Federal Reserve interest rate-setting committee.

A stronger greenback tends to be bad news for commodities by making them more expensive to buyers paying in other currencies.

Oil, which had the added pressure of data showing robust petrol stocks, eased below $69 a barrel. That's also a negative pointer for soft commodities, many of which are now used to make fuel as well as food.

Meanwhile, forecasts continue to foresee warm and wet weather where it is needed in the US, such as the corn belt, and dry spells in the southern areas currently combining winter wheat.

Wheat slips

And then there was the spectre of further commodities regulation, after senators blamed commodity index funds in part for the spike in wheat prices last year.

Spiking was not on the cards for wheat on Wednesday, with Chicago's July contract standing 7.25 cents lower at $5.39 ½ a bushel at 17:30 GMT.

Corn, too, was weak, down 4.25 cents at 3.84 ¾ a bushel, a drop in line with new-crop contracts.

That left soybeans as, once again, the top performer, if through a modest 5 cent rise to $112.84 ½ a bushel for July delivery. Further ahead contracts booked similar gains.

Sugar stars

Among softs, sugar stole the headlines by hitting its highest for nearly three years, helped by an official forecast of weak monsoon rains in India.

The country is the world's second biggest producer of sugar, and the largest consumer.

However, cocoa managed to add $15 to $1,504 a tonne for New York's September contract helped by fund buying.

Hogs slip

No such luck in the livestock markets, where Chicago hogs for July slumped 4.7% to 57.30 cents a pound, recovering marginally from limit down, which it touched earlier.

The slide followed US data showing pork cutout prices at their lowest since December.

July pork bellies were down their 3-cent limit at 60.20 cents a pound.

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