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Evening markets: wheat leads May Day parade

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Grains' early caution gave way to a rush of buying as funds stepped in to cover short positions, triggering a positive circle of acquisition.

Green lights from external markets helped put investors in a positive mood, with oil on the rise - New York crude was 1.75 cents higher at $52.87 a barrel at 19:00 GMT – and stocks resolute, if unexciting.

Sugar's rise to a near-three year high, reported elsewhere on, was another upbeat signal.

However, traders put the key to Friday's rally down to funds, with some giving up on increasingly out-of-the-money short positions, and other tucking into extra portions of longs.

"The market soared to new highs in most pits late in the session, driven by ongoing fund buying which touched off commission house buy stops, adding even more to the late surge to the upside," Vic Lespinasse at said.

Sweet for wheat

Wheat was the main beneficiary, rocketing 33 cents, or 6%, to $5.57 ½ a bushel for Chicago's May contract. Reports that, because of drought, this year's Argentine wheat plantings will be the smallest since record began in 1910 did little to hurt sentiment.

Later contracts showed similar rises, with July gaining 33.5 cents to $5.70 a bushel, and September wheat up 33.25 cents at $5.96 ½ a bushel.

That left European contracts in the shade. London May added all of £1.25 to £112.00 a tonne and its Paris comrade E1.50 to E142.00 a tonne.

Nonetheless, Paris rapeseed put in a decent showing, adding E3.00 to E301.50 a tonne for August, the first time this contract has been above E300 a tonne since late November last year.

Saucy soy

But then it may have been difficult for any vegetable oil crop to remain in the dumps when soybeans were, again, popular, if overshadowed by wheat. Strong exports... lower Argentine crops... all the news this week – bar swine flu, which traders appear to have sidelined for now.

Chicago's May contract added32 cents to $11.02 a bushel, a fresh seven-month high for a leading contract, with July and August taking on 36 cents to $10.91 a bushel a and $10.59 a bushel respectively.

Corn also put in a good showing, helped by crude and the prospect of further rain delaying US plantings.

May corn added 10 cents to $406.5 a bushel, with July up 10.25 cents at 413 ¾ a bushel.

Even pigs managed to get in on the party, with Chicago May hogs standing 0.375 cents higher at $58.75 cents a pound, with June hogs up 1.05 cents at $65.75 cents a pound.

By Mike Verdin

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