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Morning markets: crops mixed amid quality debate

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Crops got off to a mixed start, amid some debate over the state of corn and soybean crops, and pressure from external markets.

Wheat, which of late has appeared attuned most to general financial sentiment, reversed most of its gains of the last session as the dollar rebounded and equity markets went into something of a retreat.

Overnight, comfort for shares provided by Wednesday's statement from the Federal Reserve on interest rates wore off late in Wall Street trade, and prompted weak trading in Asian stock markets.

As has become typical, the dollar went the opposite way to shares as investors sought sanctuary.

Against the euro, the greenback edged up to $1.4812, making US exports less competitive. (Which is not ideal timing for the US, given that Egypt, the world's biggest wheat importer, is in the market for shipments.)

Harvest estimates

Still, wheat made some effort to improve its attractions for Egyptian buyers, shedding 3.5 cents to $5.17 ½ a bushel for December delivery at 07:50 GMT.

Other crops did a little better, as quality concerns offset some of the bear pressure of continued good weather for the much-delayed corn and soybean harvests.

"The extended weather looks mostly warm and dry until the middle of next week," US broker eHedger said.

Overnight, FCStone fuelled doubts that the crops, by weight, have suffered too much for their extended stay in fields, in rainy and, in October, freezing conditions.

The broker pegged the corn crop at 13.004bn bushels and soybean harvest at 3.379bn bushels implying, like Informa Economics on Wednesday, little if any yield loss.

Quality fears

However, some concerns remain about quality, with crops harvested wet more susceptible to a set of challenges, from rot to germination.

Chinese buyers reportedly keeping a close eye on US soybean purchases for signs of damage and deterioration.

Soybeans lost 1 cent to $9.94 ½ a bushel for November, and to $9.98 a bushel for January delivery.

Corn was 1 cent higher at $3.85 a bushel.

'Diminished' support

In Kuala Lumpur, palm oil lost ground as investors too profits following a 3.8% gain on Wednesday.

The market remains overshadowed too by fears of a loosening market, amid a typical seasonal upswing in production.

Standard Chartered Bank analyst Abah Ofon said: "Price support from palm fundamentals has diminished as the frenzied import demand from India has faded and concerns about the impact of El Nino on output have waned."

The benchmark January palm oil contract closed the morning session on the Bursa Malaysia Derivatives Exchange down 14 ringgit at 2,246 ringgit a tonne in modest volumes.


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