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Morning markets: US data overshadows joy at Greek deal

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Was it because there was a bit of "buy the fact, sell the rumour" thinking going on in financial markets on Tuesday?

Or was it because the tortured meeting which ended with the long-awaited signing of the Greek rescue package revealed that this might not be the end of the affair?

Official documents shown to eurozone ministers revealed that the austerity measures being imposed on Greece in return for a E130bn bailout might severely dent its economy, besides scaring off investors, meaning a third rescue package might eventually be needed.

Whatever, financial markets curtailed their joy at the overnight resolution, for now, in the Greek debt crisis.

Dollar dips


were mixed, rising 0.8% in Shanghai and Singapore but showing small falls in Seoul and Tokyo.

The safe haven of the


dipped 0.5% as of 08:50 GMT, a help to dollar-denominated assets including many commodities, making them cheaper as exports.

Still, Brent


eased, to fall back below $120 a barrel.

Data ahead

And many agricultural commodities could manage only small gains too, grains particularly, with the prospect of the next set of US Department of Agriculture data hanging over the market.

The USDA will on Thursday and Friday hold its annual outlook conference, which will give forecasts for US crops in 2012-13, refining the outline data offered up last week.

This week's forecasts will dominate the agenda, laying out winners and losers in the annual battle for acres in farmers' spring sowing plans, until the March 30 seedings report, based on interviews with growers themselves.

And in Chicago, it overshadowed some of the more bullish news hanging around from the last few days, such as Ukraine's apparent cap of 1.7m tonnes on


exports until July, and the slow pace of Russian shipments, and their rising price too.

'Demand for US wheat to rise'

Sure, as Lynette Tan at Phillip Futures said, "demand for US wheat is likely to rise in the next few months and may exceed the government forecast of 26.5m tonnes for the marketing year".

This was "due to strong export demand for animal feed, logistical constraints, and lower and costlier availability in the Black Sea region".

However, with world stocks in ample supply, and Rabobank on Monday, when US markets were closed, estimating US wheat sowings of 57m acres, 500,000 acres above the USDA's figure last week, investors were not so keen to commit themselves to purchases.

Chicago wheat for March edged 0.1% lower to $6.43 ½ bushel, if keeping ahead of its 100-day moving average, a key technical pointer, situated at a little over $6.37 a bushel.

Planting delays?

Nor could


do any better, falling 0.1% to $6.41 a bushel for March delivery.

This despite, as Luke Mathews at Commonwealth Bank of Australia noted, growing concerns that "dry conditions in north east China may delay spring planting across some major cropping provinces".

China is the second-ranked producer of the grain, although it is struggling to keep up with its demand, leaving its appetite for imports a source of continual intrigue in Chicago.

'Super dry areas'

It was left to


to hold up hopes for Chicago bulls, adding 0.6% to $12.75 a bushel for March, with all still not well in South American weather.

Over the weekend, rains in dry Argentina were restricted pretty much to central areas, with a forthcoming front "not really giving the super dry areas in south east Brazil - Rio Grande do Sul and Parana - significant showers and thunderstorms", said.



hardly hurt either, with the May contract closing overnight at E457.50 a tonne, the lot's highest level since last May, lifted by the prospects of, another, compromised crop in Germany, eastern Europe and Ukraine, thanks to winterkill.

And Rabobank made soybeans its top bet among agricultural commodities, forecasting that Chinese imports may prove bigger than had been expected in 2011-12, with a soft performance last month blamed on the early lunar new year and its celebrations.

Chinese import data

Official data on Tuesday showed the slowdown in Chinese soybean imports, at 4.61m tonnes, down 10.2% year on year.

And this in turn disguised a 35% drop in purchases from the US, to 3.1m tonnes, in favour of large jump, to 987,000 tonnes, in supplies from Brazil and, at 461,000 tonnes, from Argentina.

Usually these countries have little to sell so early in the calendar year, just ahead of their harvest, but a strong 2010-11 harvest carried them through longer than usual.

Sweet tooth

As for


, China's imports soared many-fold to 142,000 tonnes, mainly from Brazil, but with Guatemala also high on the list of origins.

And, with the International Sugar Organization on Monday hiking its forecast for China's purchases for 2011-12 above 3m tonnes, the sweetener added 0.7% to 24.79 cents a pound in New York, for March delivery.

The better-traded May lot gained 0.7% to 23.93 cents a pound.


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