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Morning markets: crops rise amid pre-report nerves

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Chicago crops started brighter on Thursday, feeling some impact from investors' renewed interest in commodities, with the prospect of a key US report tempting many investors to close short positions.

The dollar remained near 2009 lows against a basket of currencies, boosting the appeal of dollar-denominated assets to importers.

Indeed, soybeans were helped by news of a fresh sale of 110,000 tonnes to China, which has been a little quieter on the purchase front after a record year for purchases up to now.

Oil remained on the upward path too, standing 1.4% higher at $72.34 a barrel for New York light crude, October delivery.

Besides reflecting the switch out of safe dollar havens into assets viewed as more inflation proof, such as gold, oil's rise is a help to crops by making those used in biofuels, such as corn, look more appealing.

Australia wheat hopes

Wheat, which closed lower on Wednesday for a sixth successive day, was the one crop which might have potentially remained out of favour, after Australia said it was on target to hit official forecast of a 22m-tonne crop.

But it was helped by some remaining weather risks, and by traders' overarching concerns to get positions straight ahead of the US Department of Agriculture's latest global crop supply and demand report due on Friday.

The report is expected to raise forecasts for US corn and soybean crops, whose prices have weakened considerably in anticipation.

Wheat for December stood 1.75 cents higher at $4.58 a bushel at 07:30 GMT, with corn for December adding 1.75 cents to 3.11 ½ a bushel.

November beans were 4.5 cents up at $9.32 ¾ a bushel. Trading in the near-term September contracts has slowed to a trickle, ahead of last trading on Monday.

Palm data

In Kuala Lumpur, palm oil gained ground in the morning session on expectations that a key trade report would prove better than some analysts had expected.

In fact, the Malaysian Palm Oil Board said, just after the session closed, that Malaysia's crude palm oil stocks rose 6.2% to 1.42m tonnes, marginally below expectations.

The benchmark November contract reached noon local time settled up 44 ringgit at 2,223 ringgit a tonne on the Bursa Malaysia Derivatives Exchange.

By Agrimoney.com

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