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Evening markets: turnaround Tuesday helps crops

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Folk wisdom among Chicago traders has it that a Monday exhibiting a strong trend is followed by a "turnaround" Tuesday in which prices do quite the opposite.

"It's Tuesday and oftentimes on Tuesday prices reverse course from Monday," Vic Lespinasse, the GrainAnalyst.com trader said.

That may be the reason soybeans, at least, managed a decent bounce today.

But the case was strong for external markets also playing a part.

The dollar weakened a touch to $1.4063 against the euro ahead of a statement on Wednesday by the Federal Reserve's interest rate setting committee which investors believe may lower expectations of an interest rate rise.

A weak greenback is generally helpful for dollar-denominated commodities, making them cheaper for buyers paying in foreign currency.

Palm Tuesday

Oil certainly perked up. New York crude for August recovered from an early low of $66.37 a barrel to stand $68.35 a barrel at 16:45 GMT, $0.85 higher on the day.

A strong close earlier by Malaysian palm oil helped soybeans too. Kuala Lumpur's benchmark September contract soared 6.0% from 11-week lows to close at 2,286 ringgit a tonne, amid reviving hopes for exports.

Indeed, palm oil supported gains in many oil crops, including Paris rapeseed, which ended E2.75 higher at E294.50 for Paris's August contract.

'Overdue for a correction'

And, back in Chicago, short covering was also evident, fuelled by bargain hunting.

July soybeans were 1.9% higher at $11.73 a bushel, helping corn add 0.8% to $3.88 ½ a bushel and wheat make similar headway to $5.50 ½ a bushel.

"I think this rally is due, in part, to the fact we were down so sharply the last two-to-three weeks in all pits and prices finally reached a level where they were oversold and overdue for a correction to the upside," Mr Lespinasse added.

Nonetheless, concerns about weather remained, with conditions looking especially ideal for US corn growing districts.

Sugar sweet

Among softs, sugar was particularly strong, gaining 4.3% to 15.72 cents a pound for New York's July contract, helped by trade buying.

And London cocoa recovered 0.8% from a six-month low to end at £1,596 a tonne.

Juice, however, continued its fresh downward leg, ending down 0.5 cents at 74.55 cents a pound, its lowest since the start of April.

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