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Evening markets: wheat slips to four-month low

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It was difficult for many markets, bar those regarded as safe havens, to make headway on Monday, when fears for the economic revival remained ascendant.

Food commodities were no exception, with wheat dropping to a four-month low.

Comments from Joe Biden, the US vice president, exacerbated fears stoked by last week's unexpectedly weak American unemployment data.

Mr Biden on Sunday said the administration of President Barack Obama had "misread" how bad the economy was when it forecast unemployment reaching 8%.

Oil slips

Investors returned to refuges, excluding stocks but including the dollar, which strengthened to $1.3927 against the euro. A robust greenback typically spells bad news for dollar-denominated commodities, making them more expensive to buyers paying in other currencies.

Indeed oil fell, with New York crude for August dropping 3.5% to $64.43 a barrel at 16:30 GMT.

That is bad news too for food commodities, given that many are feedstocks for biofuels.

Wheat at lowest since March

Wheat took the headline fall. Over the day, the performance was not a calamity, especially given soft weekly export inspection data of 12.1m bushels. (Traders had been expecting up to 16m.)

Chicago's July contract slipped less than 1% to $4.95 ½ a bushel.

But the weakness added to the steady declines which have taken wheat down 27% since a June 1 high, and took wheat to its lowest since early March.

In London, July wheat was unchanged at £98.00 a tonne, with Paris wheat off E0.25 at E133.25 a tonne. The weakness of sterling and euro against the dollar provided some support.

Corn's slide continues

Corn, meanwhile, was 1.5 cents easier at $3.44 ½ a bushel for July with new crop contracts showing bigger declines. December corn, for instance, lost 10 cents to $3.47 ½ a bushel.

Favourable growing weather added to concerns of a bumper US crop, after US official statistics last week pegged corn plantings at their highest since 1946.

Soybeans were the worst performers, sliding 2.7% to $12.10 a bushel for July and 3.7% to $9.69 ¼ a bushel for November.

That was even worse than palm oil, its vegetable oil partner, closed down 2.1% at 2,129 ringgit a tonne, with India's failure to introduce in the Budget higher levels on edible oil imports helping prices recover from earlier lows.

Sugar 'profit taking'

Softs were weaker too, with news that Germany's cocoa grind fell 15.3% in the second quarter doing little to cheer sentiment.

New York cocoa for September dropped $29 to $2,465 a tonne. Weaker sterling, which hit a one-month low against the dollar, helped London cocoa for September add £9 by the close to £1,605 a tonne.

Still, even sterling could not help sugar end in positive ground, with profit taking blamed for adding extra pressure.

London white sugar for August dropped $5.7 to $440.7 a tonne, with New York raw sugar down 0.47 cents at 17.11 cents a pound.

"In sugar, there is profit-taking from the highs seen a few days ago," Romain Lathiere, fund manager with Swiss-based Diapason Commodities Management, told Reuters, the news agency.

"Sugar is one of the best-performing commodities this year."

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