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Morning markets: crops revive as rain hits Brazil

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New week, new start? Chicago crops managed a bright opening on Tuesday in their first session of electronic trading since last week's rout.

Corn set course for its first rise in six trading days. (US markets were closed on Monday for Martin Luther King day.)

A brighter picture on external markets helped. The dollar eased to $1.44 against the euro, after Greece, the eurozone bad boy, received supported the support of European finance ministers.

A weaker dollar makes US exports such as crops more competitive.

Crude oil also firmed a touch a positive influence for crops which can be used as biofuels.

The simple fact that crops appeared to be responding to outside markets was taken as a soothing sign by some investors, who worried last week that prices appeared to be heading lower whatever external stimulus was applied.

'Bearish report'

But there were other reasons given for the bounce too. One was the temptation for investors with short positions to take profits after last weeks' losses of more than 10% in corn and wheat.

Indeed, some investors believe crops were, on a technical basis, oversold during the rally.

Benson Quinn Commodities, nonetheless, took a different tack for corn after weekly regulatory data signalled that large non-index funds have huge long positions potentially yet to sell.

"At face value we would have to consider the report bearish as it would indicate that the large traditional fund is still long well in excess of 200,000 contracts depending on what they liquidated the last three sessions this week," Jon Michalscheck at the broker said.

Brazilian rains

Soybeans, meanwhile, had the support of some potentially bullish news, with the harvest in Brazil's Mato Grosso state being interrupted by rain.

And there was more to come, in the form of thunderstorms in some areas, forecaster DTN Meteorlogix said.

Brazil is America's biggest competitor on the soybean export market.

Meanwhile, soybean prices on China's Dalian exchange were higher too, up 0.6%, a signal of robust demand in the biggest importing country.

Chicago soybeans added 5 cents to $9.79 a bushel for March delivery at 07:50 GMT.

Corn for March was 2.5 cents higher at $3.74 a bushel, with wheat adding 1.75 cents to $5.11 ¾ a bushel.

Palm revives

In Kuala Lumpur, palm oil did better too, helped by the rebound in Chicago, as well as the strong crude price.

Dalian soyoil was 0.9% higher for May delivery – a positive sign, given that the vegetable oil is palm oil's main rival and China the biggest palm import market.

However, there was some caution ahead of the latest data from cargo surveyors due on Wednesday.

Benchmark April palm oil stood 13 ringgit higher at 2,503 ringgit a tonne.


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