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Morning markets: crops mark time awaiting next Greek drama

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Maybe it was because grains outperformed in the last session.

But on Friday, agricultural commodities failed to show the headway enjoyed by some other risk assets.

Shares

, for instance, soared on Asian exchanges, as they got the first change to react to Greece's decision not to hold a referendum on its bailout. Seoul, Sydney and Tokyo stockmarkets all rose 3% or so.

And, within the commodities sector,

copper

and

oil

managed to add a few more gains to those of the last session, as of 08:10 GMT.

But agricultural commodities proved less capable of adding to their firm performance of the last session.

'Lots of nervousness'

And certainly there are further reasons to fret. Not least the latest episode in the Greek saga, a no-confidence vote later on Friday.

"There is lots of nervousness in the world which keeps traders from over committing either way," Mike Mawdsley at US crop broker Market 1 said.

"As we have seen of late, any sharp rally finds willing sellers thus keeping a lid on any breakout to the upside."

'Trade seems almost uninterested'

On crop fundamentals, there were a few reasons for caution too, with the prospect of the US Department of Agriculture's latest monthly Wasde report, expected potentially to cut estimates for US corn and soybean yield estimates, perhaps not as keenly anticipated as had been thought.

"Trade seems almost uninterested in USDA report next week and may already be trading bigger South American production and slack global demand due to economic uncertainties," Kim Rugel at Benson Quinn Commodities said.

Improving hopes for South American crops were crystallised by a note from the US Department of Agriculture attaché saying that Brazil's

corn

harvest looked like coming in at 64m tonnes, 3m tonnes above the official USDA estimate.

And, as an extra bear point, a strike by Argentine

soybean

-processing workers was settled.

Even so, soybeans managed to hold on just to positive territory, helped by growing competitiveness with Brazilian supplies and drop in deliveries against the November contract, and added 0.25 cents to $12.27 ½ a bushel for January delivery.

Corn fell 0.1% to $6.53 a bushel for December delivery.

Rains where wanted, and not

Wheat

faces the depressant of rains in the drought-hit southern US Plains, hard red winter wheat country, boosting hopes for a crop which has got off to another poor start.

Nor is the prospect of a downgrade to estimates of US hard red spring wheat supplies, after the USDA announced an area resurvey, proving as supportive as it did on Wednesday, when it sent Minneapolis wheat higher.

Sure, Australia is providing some hope to bulls. While the USDA attaché in Canberra came in with some upbeat estimates for the country's wheat crop overnight, they were within official Australian forecasts, and little surprise.

What is more concerning is the rain which has, again, begun to force quality downgrades in some areas where harvest has started. Australia's Bureau of Meteorology has forecast further rains for much of the country's grain belt, notably in Victoria and southern areas of Western Australia and New South Wales.

Still, Minneapolis spring wheat for December delivery eased 0.2% to $9.15 ½ a bushel, with its Chicago soft red winter peer shedding 0.4% to $6.33 ¾ a bushel.

Not too bad

Elsewhere,

cotton

picked itself up off the floor of its recent trading range as investors looked again at weekly export data released on Thursday which, at 171,000 running bales, were respectable, if half the level of the week before.

"At least it was the best two week total since March," Luke Mathews at Commonwealth Bank of Australia said.

And in Kuala Lumpur,

palm oil

got its chance to gain on the Greek referendum withdrawal, plus persistent concerns of La Nina-amplified rains hitting Malaysia later in the year, causing production disruption.

The January crude palm oil lot added 0.7% to 2,996 ringgit a tonne, regaining 3,000 ringgit a tonne earlier for only the second time in the last six weeks.

By Agrimoney.com

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