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Morning markets: bears grumble, but crops regroup

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Crops regrouped at the close of what has been a mixed week, amid what appeared a somewhat bearish feel among Chicago-watchers.

For wheat, "charts still looks bearish and so are the fundamentals", Dave Lehl at broker Benson Quinn Commodities said.

His colleague Jon Michalscheck raised questions over the revival in sentiment on corn.

"This week's winter storm, the first of the year appeared to have gotten most of the credit… as some within the trade were talking the possibility that yields could be reduced on the upcoming report in January due to the heavy amount of snow from the storm.

"Not sure why the trade wouldn't have realised that on Tuesday or Wednesday."

'Fund liquidation'

Meanwhile, Mike Mawdsley at broker Market1 signalled it might be a wise time to think of selling soybeans.

"If you are holding old crop beans, we better keep pushing higher or you might want to look at a put," he said.

And Justin Kelly, at rival eHedger, raised a caution flag over the whole lot.

"If the short US dollar-long commodities trade unwinds further, we could see some fund liquidation before the end of the year," he said.

"Money flow to wrap up 2009 and in the beginning of 2010 will be a major factor."

Snow stops

Still, on Friday, the money seemed to be flowing in a generally positive direction, with the storms credited for continued firmness in corn, fairly or not.

While snowfall has ceased for now, it is sufficient in many parts of the Midwest to prevent harvesters getting onto the field, and with about 1.5bn bushels of corn yet to bring in.

Corn for March added 1 cents to $3.94 a bushel as of 07:30 GMT, with the December lot up 0.75 cents at $3.78 a bushel.

Soybeans did better, up 7.5 cents at $10.34 ½ a bushel for January and 7.25 cents to $10.43 a bushel for March delivery amid with some traders ascribed to an easing of pressure from the unwinding of a long soybean-short corn spread.

And wheat for March added 3.72 cents to $5.40 ¾ a bushel, building on the positive close of the last session, huge global stocks or not.

Position squaring

Meanwhile, palm oil, for which inventories are on the wane, stood in negative territory, amid what traders attributed to positioning squaring in the run up to the end of the year. (Which doesn't promise much for the next three weeks.)

And this despite Thursday's bullish official data on Malaysian stocks, showing a 2% fall rather than the 2% rise last month that traders had expected.

The benchmark February contract stood on the Bursa Malaysia Derivatives Exchange stood 2 ringgit lower at 2,519 ringgit a tonne.

By Agrimoney.com

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