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Evening markets: wheat firm as other crops sag

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Wheat did its best to stand firm amid a soft finish for crops, as soybeans lost the fillip provided by the finding of vomitoxin in animal feed rival, corn.

The day started pretty well in Chicago for soybeans and soymeal as reports of vomitoxin in corn, and its byproduct distiller's grains, prompted thoughts that livestock farmers would look to oilseeds for feed instead.

Vomitoxin can cause vomiting, organ damage and reportedly even death in livestock, with pigs particularly susceptible.

However, with the scare failing to reach boiling point, with reports of contamination apparently limited to parts of the eastern corn belt, soybeans lost their way in late deals.

Chicago's January contract stood down 3 cents at $9.87 at 18:45 GMT – 22 cents below its intraday high.

Soymeal for December did better, standing $1.80 higher at $302.80 a short ton, but that was still more than 11 cents lower than it reached in early trade.

Bull points

And this despite what might, on paper, have been a good day for crops.

The dollar weakened, making US exports such as food commodities, more competitive. The euro added a cent to $1.4926.

US export sales were in line with market expectations for wheat, at 412,000 tonnes, and corn, at 488,000 tonnes, and well ahead for soybeans, at 1.23m tonnes. Of these, 961,000 tonnes went to China.

And the Baltic Exchange's main sea freight index, a barometer of international trade and economic health, closed at its highest level since June.

'Dollar independence'

But only wheat really swallowed the bait, with the extra fillip of news of Indian imports too – the first for two years.

Sure, India, whose own wheat prices have been boosted by government stockpiling and a weaker crop, bought its cargo from Australia.

But in a year short of import demand, given better crops in deficit regions such as North Africa, any help is welcomed.

Wheat stood up 5.5 cents at $5.40 ½ a bushel for December delivery.

Corn managed a modest 1.25 cent rise to $3.91 ¾ a bushel.

"We seem to be exhibiting some independence from the dictatorship of the dollar," Vic Lespinasse, the marketwatcher, said.

Export competition

Still, with the dollar weakening, it was as much as European crops could do to post any gains.

Indeed, London wheat didn't, with the January contract ending down £0.90 at £106.45 a tonne amid some concerns that it was looking a little pricey.

"With such little interest from consumers across the EU, any sales which do take place seem to be at discounted levels by whoever is most desperate to move wheat," Hugh Schryver at the UK arm of commodities giant Glencore said.

"Feed wheat business into Spain this week was won by supplies from Romania and Bulgaria at prices significantly below UK offers."

Miller vs grower

However, one bright spot has been an uptick in UK milling wheat values.

"It really does seem to be a head-to-head between miller and grower with the former raising prices when supplies become scarce and then dropping them again as more comes forward," Mr Schryver said.

In Paris, January milling wheat added E0.25 a tonne to E132.00 a tonne, with the March contract ending flat at E133.50 a tonne.


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