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Morning markets: crops again find solace in Asia

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Yet again, crops stabilised in Asian trading hours, despite further tightening in the dollar as investors shift to risk-averse positions continued.

Their thinking was evident in the continuing round of equity market corrections, which on Thursday saw Japan's Nikkei index fall 1.8% to end back below the 10,000-point market, while Shanghai stocks were 2.3% lower at 07:20 GMT.

And, as investors seeks safety, the dollar gains, edging back to $1.4684 against the euro at one point, a marked strengthening from the $1.50 seen last week. This of course spells bad news for US exports, such as crops, by making them more expensive to buyers using other currencies.

Among fundamentals, there was little to tilt the needle, with weather forecasts still predicting drier weather to aid the US corn and soybean harvests, following imminent storms.

"Favourable harvest weather until rain arrives Thursday and Friday. Dry by the weekend again," was Meterologix's prediction for the Midwest.

Reluctant to commit

Yet, with the market being led lower in US trading, and notably by the actions of funds, Asian investors were once again reluctant to commit either to maintaining the market rout, or try to bring it to a close.

Chicago corn for December was unchanged at $4.69 a bushel.

Wheat for December added 3 cents to $4.97 ¾ a bushel. That left it, nonetheless, 9.1% down on the week.

Soybeans for November, a contract approaching its demise, added 2 cents to $9.70 ½ a bushel, with the better-traded January lost up 2.25 cents at $9.72 ¾ a bushel.

Palm slides

In Kuala Lumpur, palm oil was less robust, continuing to lose ground amid fears of rising Malaysian stocks.

Traders believe that thoughts that the seasonal uptick in production may prove more robust than had seemed likely when tree stress, after a bumper crop last year, and El Nino damage seemed more significant threats.

The benchmark January palm oil contract closed the morning session on the Bursa Malaysia Derivatives Exchange down 12 ringgit at 2,140 ringgit a tonne, taking its losses this week to 4.4%.

By Agrimoney.com

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