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Evening markets: weak dollar bolsters crops

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The weakness of the dollar helped farm commodities keep their nose ahead despite a weakening in crude prices, after Nigerian forces announced a ceasefire with rebels who had attacked oil facilities.

New York crude for August, which spent much of Friday ahead, stood $0.99 lower at $69.24 a barrel at 17:15 GMT on the prospect of continued flows from Africa's largest oil producing state.

While that would often be a trigger for selling of farm commodities, many of which are used in biofuels whose prices fluctuates in line with oil, the weaker dollar helped investors overcome nerves.

The greenback slid 0.7% against major currencies after China renewed a call for a super-sovereign reserve currency to take over from the dollar. A weaker greenback makes dollar-denominated commodities more appetising to foreign purchasers.

China boost

In Chicago, July soybeans kept themselves above $12 a bushel, although talk that Indonesia might reimpose import duties kept a lid on rumours of further Chinese buying.

"Talk [that] China bought one cargo of US beans for August shipment is helping firm up the old crop months in beans, encouraging outright buying as well as bull spreading against the new crop months," Vic Lespinasse analyst at GrainAnalyst.com said.

Indeed, while the July contract added 8 cents to $12.04 a bushel, forward contracts were a mixed bunch, with November edging back below $10 a bushel.

Corn had a flatter profile, with the 3.5 cent-rise to $3.86 a bushel in the November contract reflected in new crop lots.

Enthusiasm for corn has been hurt by ideal weather for the development of US crops.

Clearance sale

Wheat, meanwhile, added 2.25 cents to $5.35 ¼ a bushel for July delivery, with ideal weather for the US winter crop harvest diluting bullish sentiment.

Still, that failed to help London wheat trade back above its six-month low of £97 a tonne, weakness Glencore analysts attributed to impatience by farmers wanting empty silos ahead of the new harvest.

Instead of holding out for November delivery, which is priced at £113.75 a tonne, "long holders of old crop wheat, having declined this tempting offer, have instead opted for the traditional approach of clearing everything out before harvest," Glencore report said.

"As a result a market that was finely balanced has now gone into reverse as old crop sellers flood the market, suppressing prices."

Sugar melts

Among softs, sugar, the star of recent days by reaching near three year highs in New York, lost its way on profit taking.

"It is not unreasonable to expect a pullback towards 17 cents a pound," James Kirkup, senior sugar broker with Fortis Commodity Derivatives, told Reuters, the news agency,

New York's October contract ended down 1.6% at 17.41 cents a pound.

In London, August white sugar ended down 1.2% at $446.7 a tonne.

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