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Morning markets: Greece deal puts crop markets on front foot

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Financial markets looked to end a difficult week on a brighter note.

Greece's agreement with international lenders to further measures to improve its finances lent a sunnier air to risk assets. Tokyo shares, for instance, closed up 0.9%, and Shanghai stocks stood 2.1% higher in late deals.

Furthermore, the


took one step backwards, easing 0.1% against a basket of currencies, as the idea that this chapter of the Greek debt saga was over, on consent by Athens to further spending cuts on top of the E28bn ($40bn) plan settled last month, so winning a (further) E12bn rescue package.

A weaker dollar improves the case for dollar-denominated assets, making them cheaper to buyers in other currencies.

Next week is coming...


gained more than 1%, while New York


recovered 0.7% to stand at $91.67 a barrel at 07:20 GMT (08:20 UK time).

And grains showed even stronger gains, building on their recovery late in the last session on the idea that the selling of recent sessions had gone further than could be justified, for now at least.

Of course, investors will gain a better idea of where grain fundamentals are next Thursday, when the US Department of Agriculture releases data on American inventories and sowings.

"The market has to be looking ahead to the June 30 stocks and acreage reports which are just a week away, and that should provide some underlying support and consolidation as we move forward over the next four sessions," Jon Michalscheck, at Benson Quinn Commodities, said.

Wet weather


led Friday's bounce, adding 1.5% to $6.90 ½ a bushel for July, further expanding its premium over the new crop December lot, which managed only a 1.0% rise to $6.52 ¼ a bushel.

And this despite the December contract having managed, unlike earlier lots, to retake its 100-day moving average in the last session, a tick in the box for chart-followers. (Another tecnical point to note is the expiry of July options, which could provoke some unusual moves.)


gained 0.9% to $6.54 ¾ a bushel, a touch behind the new crop September lot, which added 1.1% to $6.76 ½ a bushel, with some observations of poor weather ahead too.

Lynette Tan at Phillip Futures said that a "forecast of more rain in northern US Plains for the next few days could prevent some farmers from planting all their intended wheat acreage". That is, if they haven't given up already.

"Rainy conditions in southern US Plains may also delay harvest of hard red winter wheat," she added, although has not heard yet of mention of the rains turning observations of better-than-expected quality into reverse.

Against the tide


for July added 0.4% to $13.23 ¼ a bushel, creeping back from the edges of the oilseed's recent trading range, which it was helped to on Thursday by Canadian data showing that farmers had intended higher-than-expected canola sowings.

(Although whether they found enough breaks in the rain to plant them is a different matter, of course.)



set course for the somewhat remarkable feat of closing higher, for July delivery, every day this week, even while prices of other crops have collapsed. Who said all agricultural commodities moved in the same direction these days?

The lot has been buoyed by covering of short positions ahead of the start of the expiry process today, a period which, for the May lot, caught out holders short of cotton big time.

It added 1.1% to 166.38 cents a pound on Friday, with the December lot gaining this time too, by1.8% to 121.49 cents a pound.

Seven-month low


palm oil

continued its march south, touching a seven-month low of 3,118 ringgit a tonne in Kuala Lumpur, for September delivery, before recovering a little ground to stand at 3,125 ringgit a tonne, down 0.4% on the day.

The vegetable oil is being depressed by much improved hope for production, which drove Malaysian stocks in May to their highest in 16 months.

However, there is hope for bulls. "The downside could be capped as the strong buying interest from China and Middle East could continue," Ker Chung Yang at Phillip Futures said.

"The demand for palm oil has risen due to a wide discount to competing soyoil, and as countries gear up for the Islamic fasting month of Ramadan," which starts in August.


, indeed, added 0.3% to 55.32 cents a pound in Chicago for July delivery, helped by better-than expected US crush data published on Thursday.


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