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Morning markets: ags make cautious gains ahead of data spree

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Sunshine returned to financial markets on Thursday, as the theme of a disappointing Chinese economic growth target was superceded by growing hopes for a resolution in the latest phase of the Greek debt crisis.

A E206bn debt restructuring looked nearer after private sector bondholders representing nearly 40% of securities said they supported the deal.

This on top of promising US employment data, with the private sector adding 216,000 jobs last month, according to the ADP National Employment Report.

Shares

rose, by 2.0% in Tokyo, 1.0% in Shanghai and 1.6% in Singapore, while the

dollar

eased 0.2% against a basket of currencies as of 08:50 GMT.

Main course

And the adoption of a "risk on" pose spread to agricultural commodity markets too, albeit with investors keeping one eye on the spread of data awaiting them over the next 36 hours.

The main event comes on Friday, when the US Department of Agriculture releases its monthly Wasde report, expected to make further downgrades to South American corn and, especially, soybean crops.

This is expected to underpin exports of the crops from the US, and prompt cuts to forecasts for US

corn

and

soybean

inventories at the close of 2011-12 too.

But before the main course, markets have some appetisers to taste.

Data later

Today brings weekly US export data, expected to see drops in sales of all three major crops.

For corn, export sales are seen at 500,000-700,000 tonnes, from 713,000 tonnes last time, and for

wheat

at 300,000-500,000 tonnes, down from 509,100 tonnes.

Soybean export sales are pegged at 400,000-700,000 tonnes, a drop from the 976,000 tonnes last time, old crop and new.

But then Brazil has been keeping up its own soybean exports, as data earlier in the week showed, and there is some evidence of growing international competitiveness in corn and wheat too.

Wheat competition

In corn, Israel turned to the Black Sea, probably Ukraine, for a 50,000-tonne order, a reminder that the region is back in business after the logistical havoc caused by last month's cold snap.

And this may extend to wheat too.

"Wheat offers out of the Black Sea ports are reported to be coming down in price and seemed to weigh on the market" in the last session, at Benson Quinn Commodities said.

However, rival broker US Commodities said that US soft red winter wheat, the type traded in Chicago, "is now $14 a tonne below Russian wheat and $20 a tonne below French wheat. The US wheat is some of the cheapest in the world".

Whether this is true, we will get an indication later when Egypt, the top wheat importer, releases the results of its latest tender.

Brazil report

And there is yet more data due too before we get to the Wasde, and closely-watched statistics too, with Conab, the Brazilian crop bureau, releasing latest estimates for domestic crops.

"Conab estimated Brazilian soybean production at 69.2m tonnes in February. Some in the trade believe they could go as low at 66m tonnes" later today, Brian Henry at Benson Quinn Commodities said.

After all, local officials in Rio Grande do Sul, Brazil's third-ranked soybean producing state, on Wednesday cut from 8m tonnes to 7.1m tonnes the estimate for the state's own crop.

And, staying in South America, investors will also be watching out for the latest in the wave of industrial action affecting Argentina, with 20 grain vessels said to be waiting to load while dock workers strike in support of heavier staffing levels.

Price rises

Factored into prices, grains showed some gains, lifted by the broader market mood, but failed to keep up with shares, as might be expected with uncertainty in the air.

In Chicago, wheat led, unusually, adding 0.7% to $6.44 a bushel for May delivery – looking, indeed, for its first positive close this week.

That was enough to rebuild some premium over May corn, which added 0.4% to $6.41 ¼ a bushel for May.

May soybeans gained 0.5% to $13.33 ½ a bushel – despite a 0.1% dip to $364.10 a short ton in May futures in

soymeal

, which has been such a prop to the complex in recent weeks.

Palm springs

Indeed, it was

soyoil

which was doing better, adding 1.1% to 53.57 cents a pound, as investors continued to cheer bullish sentiment coming from a

palm oil

conference in Malaysia earlier in the week.

Palm oil itself added 1.0% to 3,300 ringgit a tonne in Kuala Lumpur, helped by ideas that strong oil prices (a boon for agricultural commodities used in making biofuels), a modest production rise expected in 2012, and firm import demand spelled potentially a record year for prices.

And in New York,

cotton

for May at least stabilised, down 0.1 cents at 91.63 cents a pound, as traders awaited the outcome of a meeting on Friday to settle whether an export ban will stick, or be even partially lifted.

By Agrimoney.com

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