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Morning markets: Dubai debacle knocks crop prices

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Crops joined in the financial markets rout on Friday prompted by Dubai's debt problems as US market reopened after the Thanksgiving holiday.

Markets continued to undertake their kneejerk response to economic scares, the latest being concerns that Dubai will prove unable to repay debt due by a government fund.

The dollar strengthened, hitting $1.4847 against the euro, a tightening of very nearly three dollar cents in two days.

Investors have in times of trouble sought sanctuary in the greenback, whose strength is a bear point for US exports such as crops by making them less competitive.

Shares fell, with Tokyo's Nikkei index closing down 3.2% at a four-month low and Shanghai stocks 2.4% lower at 07:30 GMT.

And oil plunged 4.6% to $74.39 a barrel, its lowest price for more than six weeks.

Against the tide

This time crops joined in. While the exchanges open on Thursday showed a mild response to the moves in external markets, the US markets showed no such hesitancy when they reopened for electronic trading.

Chicago soybeans looked intent on going against the tide of history.

"Since 1979, the day after Thanksgiving soybeans have gone up 23 years and down three years," US Commodities, the US broker, said.

This time they were 3.0% lower at$10.23 ¼ a bushel for January delivery.

Grains weaken

Wheat had the extra headwind of an International Grains Council report which added 1m tonnes to the intergovernmental group's forecast of 2009-10 production.

The grain dipped 3.2% to $5.32 ¾ a bushel.

Corn, which came off better from the IGC report, was a touch more favoured, down 2.9% at $3.80 ¾ a bushel.

Kuala Lumpur markets were closed on Friday for a national holiday in Malaysia. Benchmark February palm oil closed unchanged at 2,482 ringgit a tonne on Thursday.


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