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Morning markets: ag selling wave continues in Asian trading

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The US may be closed for Thanksgiving, but that didn't stop markets in other countries continuing – to fall, in many cases.

Dismay at the weak German bond auction, which further trimmed appetite for risk assets such as agricultural commodities in the last session, continued to work its way through the financial system, helping Tokyo


fall 1.8% to a two-and-a-half year low.

"The worry is that if Germany can't get bonds away, what hope does anyone else have?" Victor Thianpiriya, ags analyst at Australia & New Zealand Bank, said.

Actually, not all share markets were quite so downbeat, with Sydney stocks closing down a modest 0.2%, and Singapore and Shanghai shares showing marginal gains in late deals. Seoul stocks closed up 0.7%.

Furthermore London


rose, and Brent


too, adding 0.6% to $107.66 a barrel as of 08:00 GMT.

Rains in Malaysia

But Asia-listed agricultural commodities were still grappling with the Germany news, which prompted sharp drops in grain prices on Wednesday.

Palm oil

dropped 1.3% to 3,120 ringgit a tonne, following the 2.9% slump in rival vegetable,


, in Chicago overnight.

And this despite continued warnings of heavy rains in Malaysia, the second-ranked palm oil producer, believed to be being worsened by the La Nina weather pattern, and threatening disruption into 2012.

Indeed, with many analysts expecting the weather to support palm prices, there are ideas among some investors that importers such as India and Pakistan may yet go on shopping sprees to restock after recent festivals.

Finding tread?

In Tokyo,


recovered from losses of more than 2% to close the morning session down 0.1% at 263.50 yen a kilogramme.

The tyre ingredient was boosted by talk of China buying it from Thailand, the top exporter, to take advantage of low prices.

Tokyo rubber stands at less than half the price it reached at February's peak, of 535.7 yen a kilogramme.

Still, it is showing signs of having found some kind of bottom, managing seven trading days without putting in a fresh two-year low.

Soyoil slips

Meanwhile, in China itself, farm commodity futures fell across the board. But notably for soyoil, which tumbled 2.9% to 8,676 yuan a tonne for May delivery, following its Chicago peer, and amid talk of the country buying from South America.


themselves were 0.8% lower at 4,223 yuan a tonne for


, while


east 0.2% to 2,161 yuan a tonne for the same month.


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