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Morning markets: Apple and BSE relief foster gains in ags

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So the US BSE outbreak is not so much of a threat after all?

The US Department of Agriculture confirmed that a case of so-called mad cow disease had been found in California, in a dairy cow.

But no meat from the infected animal had entered the food chain, meaning exports should be unaffected.

Livestock investors themselves appeared cautiously satisfied, allowing Chicago's May feeder

cattle

lot to recover 0.1% to 147.975 cents a pound as of 08:50 UK time (02:50 Chicago time) while June live cattle rebounded 0.4% to 112.000 cents a pound.

And that helped Chicago crops, many of which are used in animal feed, revive too, with the grains and soybeans all pointing the same way, upwards, not something investors have been used to of late.

Apple boost

General market mood helped too, with

shares

gaining ground on Asian markets, by 1.0% in Tokyo and 0.8% in Shanghai, underpinned by well-received results from Apple overnight.

Shares in the technology group, which sold 35m iPhones and 11.8m iPads during the latest quarter, ahead of market estimates, soared 7% in after-the-bell trading.

Results from Credit Suisse, SAP and Siemens early on Wednesday also bolstered sentiment.

Indeed, the safe haven of the

dollar

eased a touch, making dollar-denominated exports, such as many commodities, more appealing to buyers in other currencies.

'Hard freeze'

But there were other reasons to buy crops too, with the focus remaining on the latest downgrades to the Argentine soybean crop, down to 42.5m tonnes by Oil World and 41.5m tonnes by Soybean and Corn Advisor.

The USDA has the figure at 45.0m tonnes.

"Some private analysts even bet on a production below 40m tonnes," Paris-based Agritel said, and the drought-hit drop after all faces fresh weather threats, from cold temperatures.

"The hard freeze that occurred in Argentina was centred in the lower two-thirds of the province of Buenos Aires," Brian Henry at Benson Quinn Commodities noted.

"Temperatures reached lows of 26-30 degrees Fahrenheit, which can cause damage to soybeans that are not mature," he said, adding that the freezes may not be the last.

Prices rise

At Market 1, Mike Mawdsley said it was "too early to know for sure" what damage the cold temperatures had caused so far.

"But old crop soybeans have certainly traded the news," he added.

Indeed, the May contract added 0.8% to $14.72 ½ a bushel, a fresh high for a spot contract since September 2008, with the better-traded July lot rising in line to $14.76 ½ a bushel.

November soybeans gained 0.4% to $13.57 ½ a bushel, making a late bid for further acres in US spring sowing plans.

'Putting the brakes on'

Indeed, while

corn

, soybeans' main rival for plantings, gained ground, it was by a more modest 0.3% to $5.42 a bushel for the new crop December lot.

The May lot added 0.2%, to $6.19 ¾ a bushel, with the July contract up 0.3% at $6.09 ¾ a bushel.

Sure, cold weather in the US represents a risk to rosy crop forecasts.

"In March it appeared as if corn planting would advance at a record early pace this spring, but cold temperatures in April are putting the brakes on," Gail Martell at Martell Crop Projections said, adding that sprouting would be "further hampered by the cold forecast this week in the Midwest".

'Choppy, whipsaw environment'

However, corn futures have continued to feel pressure from disappointment over the relatively low levels of confirmations of corn sales to "unknown", believed to be China, compared with figures of up to 2m tonnes which have been in circulation.

Furthermore, Lynette Tan at Phillip Futures raised a question over the competitiveness of US export supplies, noting that "Taiwan bypassed the US and bought cheaper corn from Brazil".

Indeed, corn lagged fellow grain

wheat

, which gained 0.6% to $6.28 ½ a bushel for May and to $6.36 ½ a bushel for July delivery in Chicago, and still reckoned cheap by world standards.

With frost an issue for US wheat seedlings too, and even more so for winter crop in an unusually-developed state, wheat there "could be a choppy, whipsaw environment in wheat coming up", Mr Mawdsley said.

At PFGBest, Tim Hannagan said: "There's a couple of chances for frost damage Thursday and next Monday. Wheat traders are watching closely."

Sugar rebound

The positive feeling spilled over into soft commodities too, with New York

cotton

adding 0.6% to 91.96 cents a pound for July delivery, recovering from a spot of profit-taking in the last session.

And New York raw

sugar

for July jumped 1.2% to 21.87 cents a pound, continuing to benefit from talk that the break in prices over the last two weeks had stimulated demand from end-users, to whit Egypt's purchase over the weekend.

However, in Kuala Lumpur,

palm oil

continued its decline, falling 0.1% to 3,460 ringgit a tonne, as latest data from cargo surveyors continued to show Malaysian exports falling so far this month, by 2.9% according to Intertek Testing Services.

By Agrimoney.com

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