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Morning markets: crops stage Groundhog Day

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Crops started off with a Groundhog Day feel, as Chicago soybeans once again took the lead from lagging grains, while Kuala Lumpur palm oil eased.

The early morning has come to be the best part of the day for soybeans, which started the previous three sessions positively too, only to end lower.

On Wednesday, January soybeans stood 3.5 points higher at $9.94 ½ a bushel at 07:45 GMT, with the March contract staggering back above $10 a bushel, up 3.5 cents at $10.02.

And again firmer prices in China looked a contributor, with soybeans standing 0.2% higher on the Dalian exchange, near a 14-month high.

China is the biggest importer of US soybeans, and Dalian prices, as an indicator of pricing pressure in the country, have begun on take on large significance in Chicago.

Argentine estimate

Other news should have been factored in already, including the estimate from the Rosario grains exchange late on Tuesday of an Argentine crop of 50.8m tonnes for 2009-10.

The exchange pegged plantings at 18.7m hectares, with an average yield of 2.75 tonnes per hectare.

The production figure is lower than the US Department of Agriculture estimate, of 53m tonnes, but still a record, and is a reminder of the competition that US soybeans will face on export markets from early next year.

Traders also warned against reading too much into market movements for now, with the Christmas break approaching.

"Overall volume remains low and that makes it dangerous to draw any substantial conclusions," Darrell Holaday at Country Futures said.

Field loss

The grains, meanwhile, started lower, with corn down 0.5 cents at $3.98 ¼ a bushel for March, and wheat for the same month down 2 cents to $5.21 a bushel.

Overnight, the USDA pegged the delayed US corn harvest as 95% complete, in line with market expectations, with farmers in Nebraska, North Dakota and Wisconsin notably behind.

The 5% of the crop outstanding equates to about 650m bushels of soybeans, some of which may now never be harvested, analysts believe.

"This should indicate that roughly 65m bushels, or 10% of the remaining bushels, could end up as field loss," Jon Michalscheck, at Benson Quinn Commodities, said.

China read across

In Kuala Lumpur, palm oil was in danger of a third successive negative close, with the benchmark March contract down 4 ringgit at 2,511 ringgit a tonne.

Another weak performance by Dalian soyoil, the main competitor to palm oil in the vegetable oil market, was blamed in part for the decline, with some traders also blaming the stronger dollar.

Many palm products are traded in dollars, and become less competitive as the greenback appreciates.


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