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Evening markets: wheat leads crops recovery

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Farm commodities stage a firm recovery as a change in the financial weather, prompted by comments from Timothy Geithner turned headwinds into tailwinds.

Mr Geithner, the US Treasury Secretary, told US politicians that the "vast majority" of banks were running with a capital cushion, easing jitters over the financial sector.

Equity and oil prices, whose steep falls on Monday send crop investors running for cover, turned favourable again on Tuesday, albeit failing to recover all lost ground.

Even the dollar chipped in by reversing gains against the euro and, in particular, sterling to give US commodity markets, at least, an extra boost.

'Planting way behind'

Among the main grains, wheat topped the leader board as the subsidence of financial market storms allowed investors to take stock of Monday's US planting report showing spring wheat sowing behind schedule and winter wheat still suffering from drought damage. Chicago's May wheat contract added 2.2% at $5.15 ¾ a bushel at 17:00 GMT.

Paris wheat also managed a good showing, adding E2.75 to E141.00 a tonne. But London was held back by the stronger pound, adding just £0.25 to £107.75 a tonne.

The planting report also helped Chicago corn, which added 1.5% to $3.75 a bushel as traders digested the scale of delays wet weather was causing US growers.

"Planting progress is way behind, so that's supportive," a US trader told Reuters.

For once, soybeans held up the rear, adding a modest 1.3% to $10.31 ¾ a bushel, with forecasts of tight stocks and strong Chinese demand continuing to provide support.

Sour juice

Among soft commodities, New York cocoa recovered 1.7% to $2,420 a tonne, despite reports of favourable weather in the Ivory Coast, the main producing country.

July sugar managed to close 0.75% firmer at $13.42 a pound, paring early losses, with July coffee also recovering from negative territory to end unchanged at $1.1360 a pound.

Orange juice, however, proved unable to shrug off the bears, amid talk of wetter weather dousing parched Florida crops. New York's may contract added $2.95 to Monday's losses to close at $80.65 a pound.

Earlier, palm oil also closed lower, although well above intraday lows, as talk of low stocks returned.

"The thing is the physical side is still tight," a trader said. "Plantation firms are not in selling mood."

Bursa Malaysia's benchmark July contract closed 11 ringgit down at 2,435 ringgit a tonne after touching 2,377 ringgit earlier.

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