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Morning markets: China imports helps soybeans regain lead

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Wheat

returned to the bottom of the pile in Chicago as the switching which boosted it in the last session waned, relieving pressure on

corn

and

soybeans

in the process.

Indeed, corn and soybeans chalked up notable gains as of 09:00 UK time (03:00 Chicago time) - as they had done 24 hours before, in advance of a trend of unwinding "short wheat, long corn/soybean" positions which kicked in later in the day.

The incentive to shake-up portfolios is getting a boost from the prospect later of the US Department of Agriculture's latest monthly Wasde report on world crop supply and demand, key events of the agricultural commodities calendar.

However, the Wasde is not the only stimulus blipping on the crop investor's radar.

Rapid planting

Last night, for instance, brought weekly USDA data on crop progress which showed US corn sowings starting at a record pace, hitting 7% completed by Sunday.

Missouri growers were 23% finished, up 17 points on the average pace, with Illinois growers 17% completed, compared with just 1% completed typically by now.

One reason wheat felt pressure was data showing not just that growers were well ahead with spring wheat sowings too, getting 21% in the ground compared with 5% on average by now, but that the condition of winter crop improved too.

The proportion of US winter wheat rated "good" or "excellent" rose to 61%, from 58% the previous week and 36% a year before.

Chinese imports soar

Soybeans, meanwhile, although not featured in the overnight USDA data (they are typically sown later than corn and spring wheat), did show up heavily in a Chinese trade report.

The world's top soybean buying country imported 4.83m tonnes of the oilseed last month, a figure up 26% month on month, and 38% year on year, customs data showed.

Imports of vegetable oils, such as

soyoil

, rose too, to 580,000 tonnes, up 5.5% from February and up 81% on March 2011.

And buy-ins of grains barley, corn, rice, and wheat rocketed six-fold year on year to 1.64m tonnes, making them the fastest growing of all China's commodity imports last month.

Chinese buying, while increasingly showing up in wheat too as livestock farmers seek cheaper grain, is particularly sensitive for corn, given the potential for huge imports and more restricted supplies than in wheat.

'Fresh 16-year low'

And, with the Wasde set to cut estimates for both US corn and soybean stocks as of the end of 2011-12, investors were reluctant to cut positions in either of these crops.

"US corn supplies in the report are expected to fall to a fresh 16-year low before the fall harvest," Ker Chung Yang at Philip Futures noted.

"That could signal razor-thin supplies this year, which could stoke food inflation and hurt margins for food companies."

Chicago corn for May gained 0.6% to $6.53 a bushel, while May soybeans added 0.7% to $14.40 ¾ a bushel.

Wheat for May, meanwhile, eased 0.25 cents to $6.42 ¾ a bushel, increasing its atypical discount to corn.

Chinese prices

Soybeans also got a hand from firm prices on China's Dalian exchange, where best-traded September soybeans rose 0.4% to 4,660 yuan a tonne.

The May contract added 0.2% to 4,509 yuan a tonne, the best close for a spot lot since 2008.

And on the Zhengzhou, September

cotton

soared 0.8% to 21,430 yuan a tonne, helping prices in New York higher too, by 0.7% to 90.10 cents a pound.

China is the world's top cotton producer, importer and consumer.

Rubber dips

In Kuala Lumpur,

palm oil

added 1.0% to 3,609 ringgit a tonne, helped by the Chinese vegetable oil import data, although has failed yet to beat the last session's intraday, one-year high of 3,623 ringgit a tonne.

However, Tokyo

rubber

eased 0.8% to 322.20 yen a kilogramme, failing to gain support from Chinese imports of 190,000 tonnes last month (of natural rubber).

While up 27% month on month, the figure was lower than the 210,000 tonnes recorded in March 2011.

By Agrimoney.com

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