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Evening markets: soybeans raise game on 'big day'

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Traders were looking for Thursday to set something of a pattern for crops. What, with prices trading near technical levels, moves from which were viewed as likely to set a pattern – up or down.

"It is a big day today," US Commodities, the Iowa broker, said.

As it was, only soybeans appear to have made a decisive break in Chicago, and in bulls' favour. The January contract closed 12 cents higher at $10.39 a bushel, its strongest close since September 1.

Strong exports

The reason? Buying by funds and speculators, as ever, it seems.

"Funds are estimated buyers of at least 4,000 soybean lots," Vic Lespinasse, at GrainAnalyst.com, said, with an hour or so of trading to go.

And fundamentals may have had something to do with it, too, with some bullish export data. The US Department of Agriculture announced the sale of 116,000 tonnes of US soybeans to China, showing the world's biggest buyer was still in town.

Weekly export sales for soybeans, at 1.35m tonnes, and soymeal, at 357,000 tonnes, were also viewed as strong.

Dollar muscles up

The rise was all the more remarkable because it came against a weak backdrop, with investors once again reducing their exposure to risk.

Exactly why, it was difficult to tell, with analysts blaming concerns that the equity rally was showing signs of fatigue.

But it showed up with all the normal symptoms – weakening shares (down 1% plus on both sides of the Atlantic), sliding oil, which stood 2.5% lower, and a rising dollar.

That's a bit of a killer for US exports, such as crops.

Mixed grains

So corn's 3 cent decline to $3.95 a bushel had something for everyone. Bears could point to direction - downward - while bulls could take solace in the quantum – small, all things considered.

(And all things included poor US weekly export sales of 353,000 tonnes.)

The same went for wheat which while better blessed on the weekly exports front, at an in-line 362,000 tonnes, was overlooked yet again by Egypt in a tender.

December wheat was down 3.75 cents at $5.62 ½ a bushel.

European slide

Indeed, if there was anyone who might be left feeling peeved, it was the Europeans, which fell despite some good news in the Egyptian tender (both France and Germany, with Russia, got on the rostrum) and weaker currencies against the dollar.

January wheat lost £1.35 to close at £106.65 a tonne in London, and E0.75 to E133.50 a tonne in Paris.

"No-one is getting too excited about the [Egyptian] export order because there is still so much Black Sea grain to fight against," a trader told Agrimoney.com.

Juice sweet

Investors in softs weren't getting too excited either, with prices closing lower almost across the board on the stronger dollar.

Almost, because juice, which must get the award for the least correlated of commodities, managed to end 1.10 cents higher at $1.1395 a pound in New York, for January delivery.

Fundamentals had a part to play, with America's National Weather Service forecasting below-average winter temperatures in Florida, the country's main citrus-growing state, which is already on track for a steep drop in production.

By Agrimoney.com

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