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Evening markets:upbeat sowing talk boosts pressure on grains

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The bright start to Wednesday for agricultural commodities gave way to a drizzly finish, as funds dragged more of their positions towards the exits.


became something of a rallying point for the bearish cause, amid a deteriorating technical picture, with the Chicago's May lot adding the 50-day moving average to the key chart points it has surrendered this week.

"Funds continue to sell-off in the corn markets," US Commodities said/

At Country Futures, Darrell Holaday said: ""The technical breakdown yesterday in the May corn has prompted a significant amount of liquidation.

"The move below the 200-day moving average was the primary negative technical signal for the funds."

'Negative for corn'

There was some soft news on fundamentals too, with official data showing US corn ethanol production rising last week, but only by 1,000 barrels a day, leaving output at 893,000 barrels a day, near to its lowest since the autumn.

US ethanol inventories rose 3% to a record 22.7m barrels.

Furthermore, Chinese customs data on corn imports were, at 521,000 tonnes, firm but not outstanding, with the figure down 31% month on month.

Indeed, there is a growing case to be made for corn substitution with


, for which imports hit a record high of 372,300 tonnes.

There was also talk of China purchasing 350,000 tonnes of Australian feed wheat over the last week.

"That is negative for corn," Mr Holaday said.

'Rising acreage estimates'

In addition, ideas are growing again of the size of US corn sowings this spring, given warm weather with rain around too.

"US weather is favourable for early planting with Midwest temps well above normal," Benson Quinn Commodities said.

"Much-needed rains are forecast for the upper Midwest and northern Plains which would improve farmer planting outlook."

The conditions have "analysts' raising corn acreage estimates with many now favouring 95.5m corn acres, up from US Department of Agriculture estimate of 94.0m", the broker said.

At Australia & New Zealand Bank, Scott Briggs said: "Markets are talking up the potential of ongoing warm weather meaning early corn plantings, big yields and potentially new crop being harvested in August."

End-user buying…

Corn for May dropped 0.9% to $6.42 a bushel, leaving only its 100-day moving average among the main ones it is still above.

And wheat could do no better, lacking the support of squeezed world supplies, and indeed with weather looking good for US spring sowings of this grain too.

"We are hearing reports that farmers have started to plant spring wheat in northern Minnesota and North Dakota," Benson Quinn said.

Share the broker added that "yesterday's steep sell-off seems to have attracted end-user interest with global wheat tenders active overnight".

But it was not enough to offset fund selling. Wheat for May dropped 1.0% to $6.36 ¼ a bushel in Chicago, although at least closing level in Paris, at E208.75 a tonne, helped by some weakness in the euro.

Chinese buying

What crops needed to rise was a solid story, which soybeans


through Chinese estimates of 29m tonnes of imports in the first half of the year.

With customs data showing imports in February falling month on month to 3.8m tonnes, that implies quite some pick-up to come - with Cofco foreseeing June's figure coming in close to 7m tonnes.

And it tallied with market rumours of Chinese buyers in the market again, although no deals were confirmed by the USDA through its daily reporting system.

"Soybeans did find some support on the news of China showing renewed interest in US soybeans," US Commodities said.

There is "still solid speculative buying in this market", Mr Holaday added.

Soybeans for May closed up 0.7% at $13.55 a bushel.

Coffee perks up


also bucked the trend, adding 0.6% to 184.70 cents a pound in New York for May delivery, helped by Societe Generale following Macquarie Securities in cautioning over expectations that prices have too much further to fall.

It echoed too that the premium over London robusta coffee had shrunk enough too. The London May lost finished 0.5% lower at $2,022 a tonne.

But New York


for May ended down 0.6% at $2,359 a tonne. And raw


for May fell 1.1% to 25.33 cents a pound.


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