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Morning markets: crops make cautious headway

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Corn and wheat returned to moving in the same direction as soybeans, and upward, in early deals on Wednesday, as a weaker dollar provided some boost in the absence of fund buying.

The greenback continued a modest decline sparked by comments from Ben Bernanke, the head of the US Federal Reserve, that America's economy still had more recovery work to do, while unemployment could stay high for a while.

Against a basket of currencies it slipped by 0.2%, making US exports such as crops more competitive.

Indeed, it underpinned prices despite a continued no-show by the funds which had been expected to turn up at the beginning of the month.

"There has simply been very little fund buying interest since December 1 and that has sparked some liquidation," Darrell Holaday, at broker Country Futures, said.

Even buying in soybeans, the strongest pit of late, "is primarily in the hands of commercials and smaller speculators", he added.

Australian revision

Chicago's best-traded March wheat contract added 4 cents to $5.52 a bushel as of 07:30 GMT.

There was some potentially bullish news on wheat fundamentals, with Australia cutting its official forecast by more than 720,000 tonnes to 21.99m tonnes.

Still, that cut looks a drop in the ocean of wheat sitting in stores of major exporting countries.

Snail's pace

Some fundamental news on corn was a little more convincing, with Washington's latest crop progress report showing the US harvest still only 88% complete, up only 9% on the week compared with the at least 11% rise that traders had expected.

"Harvest progress remains at a snail's pace as the majority of the remaining acres are those that are excessively wet and have struggled to shed much if any of their excess moisture over the past month," Jon Michalscheck at broker Benson Quinn Commodities said.

And farmers may have problems getting the remaining 1.5bn bushels of the crop in anytime soon.

"Reports of a winter storm to move across a large section of the central and upper Midwest over the next 48 to 72 hours should keep the pace rather slow for the balance of this year," Mr Michalscheck said.

Corn for December rose 2.75 cents to $3.71 ½ a bushel, with the March contract up 4.5 cents at $3.88 ½ a bushel.

Palm data

Soybeans, meanwhile, reported seven-cent gains for both the January contract, which hit $10.60 a bushel, and March lot, which rose to $10.68 a bushel.

Soybeans have been the strongest of Chicago's big-three of late, helped by year-high prices in China, the world's biggest bean buyer.

Palm, its vegetable oil rival, also remained firm in Kuala Lumpur, supported by forecasts from leading analysts of prices of 3,000 ringgit a tonne next year.

However, the prospect of key data on Thursday from the Malaysian Palm Oil Board kept a lid on investor enthusiasm, with the benchmark February contract adding 3 ringgit to 2,562 ringgit a tonne.

By Agrimoney.com

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