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Morning markets: crops dip as post-euro-deal euphoria wanes

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Is it that time of year again? When Argentine crop exports are imperilled by strikes?

It was truck workers protesting this time, attempting to stop shipping from the port of Rosario, which handles the great bulk of Argentina's farm commodity exports, in an effort to press demands for a minimum hauling tariff.

The strike does not yet seemed to have gained traction enough to dent Rosario shipments.

Which meant that even this factor was having trouble turning into a support for US crop prices, which fell back on Friday as some of the euphoria over the eurozone rescue deal wore off.

It was not just agricultural commodities either, with London


giving back a small portion of the last session's gains, and Brent


giving back a touch too.

Indeed, the dollar, investors' favoured safe haven, followed up Thursday's hefty losses with a 0.2% gain, making dollar-denominated assets that much less appealing for buyers in other currencies.

Rubber's bounce

Some markets, which closed their last session before getting full exposure to the post-euro-deal bounce, made decent headway.

Shanghai stocks added 1.7% and Tokyo shares 1.4%.

That went for some farm commodities too, such as Tokyo


, which soared 3.1% to 309.30 yen a kilogramme, taking its gains since last Friday's 14-month low to 12%.

And this despite China asking for delays of some shipments, after inventories in the Qingdao bonded warehouse hit more than 200,000 tonnes, according to market estimates.

China unimpressed?

But Chinese farm commodity futures lost early headway, with best traded May corn, for instance, falling back from 2,277 yuan a tonne to stand at 2,262 yuan a tonne on the Dalian exchange, up 0.1% on the day. And this after minimal gains in the last session too.

On the Zhengzhou, May


gained a modest 0.5% to 20,405 yuan a tonne, 230 yuan below an early high.

This pullback hardly worked in favour of New York cotton, which after managing to build some gains on Thursday's limit up close, retreated to 103.71 cents a pound, down 0.6%, for December delivery.

The lot indeed seems to be reverting to the 98-104 cents channel highlighted by Louisiana trader Mike Stevens.

'Key level to watch'

As for the main grains, what went up, came down.


, Chicago's standout performer in the last session, gave back 0.9% for December delivery, to stand at $6.38 ½ a bushel as of 07:30 GMT (08:30 UK time), and not looking like testing a key technical level identified by Brian Henry at Benson Quinn Commodities.

"Regardless of which wheat market you are involved in, the key level to watch is the $6.49 ½-a-bushel level in Chicago's December contract," he said.

"Expect a settlement above this level to trigger additional fund buying, which should introduce $6.84 a bushel as the next upside objective."



fell back 0.5% to $6.48 ½ a bushel for December, while


dropped 0.6% to $12.27 ½ a bushel.

Weak exports

But then, behind the buzz over the eurozone debt settlement, there have been bearish forces ticking away, Thursday's weekly US export sales data being one, which continued to gather concerns over demand at higher price levels.

"These are the kinds of sales figures we are used seeing in the latter half of the marketing year when demand shifts to fresh South American supplies," Benson Quinn's Kim Rugel said, talking of soybeans, for he termed which export sales of 227,600 tonnes for 2011-12 "anaemic".

And, thinking of South America, there are no signs yet of enough La Nina effects to cap expectations of bumper crops, with the Buenos Aires Grain Exchange lifting to 3.74m hectares, from 3.5m hectares, its estimate for Argentina corn plantings, citing recent rains.

Nor has there been any confirmation yet if a fresh round of rumours about Chinese crop import purchases, talk seen as a contributory support the last session's rally.


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