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Morning markets: clouds return to crop markets

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Clouds returned to crop markets on Wednesday, blocking out the rays of sunlight apparent in the last session, with crops falling in both Chicago and Kuala Lumpur, and wheat hitting a fresh two-year low.

The fall in the dollar slowed, limiting support from that sphere in making greenback-denominated crops cheaper on export markets.

The currency marked time near its 2009 low against the euro, while losing some ground against Australia and New Zealand dollar.

Gold also failed to make further headway, while remaining a little over $1,000 an ounce. Inflationary concerns reflected in the high gold price were a big prop to commodity prices on Tuesday.

Oil's progress slowed too, with New York light crude standing $0.40 higher at $71.49 a barrel for the October contract.

China revision

Still, that was better than Chicago farm commodities could manage, with traders remaining focused on the prospect of huge upgrades to American yield estimates in Friday's US Department of Agriculture global crop report on Friday.

China's downward crop revisions did little to help the cause, with official estimates remaining well above levels some analysts are forecasting.

The latest crop progress gave little support to prices, showing condition remained good.

And weather looked unlikely to throw crops off their stride for now.

'Generally favourable conditions'

For soybeans, Meteorlogix forecast "generally favourable conditions for pod setting and filling soybeans through the Midwest with adequate rainfall in most areas. Warmer weather will benefit the crop until cooler weather arrives later in the weekend."

For eastern and western US corn, the forecast was for "generally favourable conditions for filling corn.

"Crop development is remains well behind normal in some areas making the crop vulnerable to an early freeze. Warmer temperatures this week will improve crop development before cooler weather arrives later this weekend."

While there is a realistic threat of a freeze in Canada this week, that does not appear to be on the US agenda at the moment.

Two-year low

Corn dropped 1 cent to $3.06 1.2 a bushel for December delivery. The September lot was 0.75 cents lower at $3.02 a bushel in thin trade.

For soybeans, the November lot was 4 cents lower at $9.32 ½ a bushel, and the September contract off 2.5 cents at $9.68 ¾ a bushel in negligible volumes.

Wheat for December hit $4.53 ½ a bushel, a fresh two-year low for a nearest-but-one contract, before recovering some ground to stand at $4.55 ½ a bushel, down 3.5 cents on the day.

The September contract also set a fresh two-year low for a near-term lot of $4.26 ¾ a bushel, but in meaningless volumes.

Export worries

Palm oil also resumed its direction south, amid jitters ahead of key Malaysian crop and export data expected on Thursday.

The Malaysian Palm Oil Board will announce estimates for August palm oil exports, production and stocks, while Intertek Testing Services and Societe Generale de Surveillance, the cargo surveyors, will unveil export data, which investors are not expecting to be particularly good.

"The market has already been quiet the last one week. In major ports like Pasir Gudang or Port Klang you do not see many vessels queueing up," a trader told Reuters, the news agency.

Benchmark November palm lost 29 cents to 2,181 ringgit a tonne in the morning session on the Bursa Malaysia Derivative Exchange.


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