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Morning markets: crops ease along with frost fears

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Crops once again started on a weak note, with fears of a crop-damaging US frost once again on a downswing.

While latest global forecast system (GFS) prediction - which uses a model run by America's National Oceanic and Atmospheric Administration - showed cool weather in the Midwest later next week, with a potential freeze in northern parts, the changeability of longer-term weather guesses has provoked some scepticism among investors.

Shorter term, Midwest temperatures will be "mostly above normal, during the weekend, near to above on Monday", Meteorlogix said.

The later frost hits, the more mature autumn crops will be, and the less yields will suffer.

Brazil rain

Meanwhile, the dollar provided little impetus, holding its ground against foreign currencies, staying above year-lows against the euro hit earlier in the week. A weakening in the greenback would have made US exports such as food commodities more competitive.

And soybeans had the extra struggle of rains in Mato Grosso, creating good conditions for plantings in a state which produces about 30% of Brazil's crop.

Brazil, the world's second-biggest soybean producer, is set to raise output from 57m tonnes to 62-64m tonnes this year, increasing competition on export markets to US beans.

Chicago soybeans for November slipped 9 cents to 9.11 ½ a bushel, falling to within 1% of a five-month low, while December corn was 5.5 cents lower at $3.24 ¾ a bushel.

The improved sentiment which helped wheat on Wednesday appeared to have run dry for now, with the December contract down 3.25 cents at $4.56 ¾ a bushel.

Palm slips

In Kuala Lumpur, palm oil closed the morning session on the Bursa Malaysia Derivatives Exchange down 45 ringgit, or 2.1%, at 2,101 ringgit a tonne.

Volumes, at 4,780 lots traded, were better than on Wednesday, when many traders remained away after a holiday weekend.


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