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Morning markets: crops rise as dollar grip relaxes

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Crops did their best to put Turnaround Friday into Chicago trader's vocabulary, recovering some ground lost in the last, torrid session.

The dollar helped, by giving back some of the ground grained on Thursday, when its jump was viewed as the main reason for falls of 3%+ in the main Chicago food commodities.

Against the euro, the greenback weakened near to $1.44 by 07:45 GMT, well below the $1.51 levels of two weeks ago, but recovering 1 cent on the day.

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

Oil chipped in with a 0.4% rise, beginning to show something of an upward trend.

That helps food commodities, many of which, including corn, soybeans and wheat, are used to make biofuels.

Argentine sowings

And all three crops made headway, overcoming some small fundamental roadhumps. Overnight, the Buenos Aires Grains Exchange raised its estimate for Argentina's corn plantings by 75,000 hectares to 1.95m hectares.

In China, soybean prices eased 0.3% on the Dalian exchange.

Prices in China, the world's biggest soybean buyer, are being keenly watched as a sign of domestic market pressures, which have prompted Beijing to take a look at releasing some of its food commodity stockpiles.

Traders are also bracing for a switch in Chinese purchases from the US to South America, when Argentine and Brazilian crops come onstream early next year.

January soybeans rebounded from a six-week closing low by 6.75 cents to $10.28 ¾ a bushel, with March corn up 1.75 cents at $3.98 ¾ a bushel.

March wheat added 5 cents to $5.23 ½ a bushel.

'Market unpredictable'

Nonetheless, analysts warned investors to be on their guard, given the wind-down into the Christmas period.

"The market has become unpredictable for now," Justin Kelly at broker eHedger said.

Mike Mawdsley at rival Market1 said he "wouldn’t rule anything out in this volatile environment", noting that soybeans had in 24 hours covered nearly its entire trading range over the last month.

"Get used to it folks," he added.


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