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Morning markets: dollar dip helps corn forget weather nerves

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So just how likely is it that the weather is to improve dramatically for US corn farmers?

Conditions are certainly looking better for farmers in major US corn regions, notably the eastern Corn Belt, at the end of this month.

But much of the debate is what happens after about May 4, when weather models have plugged in "a new system", David Tolleris at WxRisk.com said.

"If the May 4-5 low falls apart and there is more dry weather, this would be seen as being bearish for upward corn prices," Mr Tolleris said.

"If the low is followed by more wet weather, this would be seen as being bullish. What we may be looking at is a dry window of a few days.... from April 29 to May 3.

Whatever, "the Sunday afternoon weather forecasts will be a big deal".

'Driving withouth brakes'

Which would be a reason to tread carefully anyway, but especially ahead of a three-day weekend in the US for Easter (and four-day in some countries, such as the UK), with Jewish Passover festival already started.

So investors were happier to go with the flow in early deals on Thursday, rather than prolong the stampede to the exits in

corn

which marked Chicago's last session, sending the grain, for May, back to its 20-day moving average of $7.32 ¾ a bushel.

(It was an experience which, after corn futures' rise to a record price last week, Jon Michalscheck at Benson Quinn Commodities likened to "driving up and over a mountain without brakes".)

And the flow was broadly positive, with those concerns over America's sovereign debt rating fading into the background for now, with concerns over Spain's for that matter, and investors applauding upbeat corporate results in recent days from the likes of Goldman Sachs, IBM and Intel.

Tokyo shares closed up 0.8%, with Hong Kong stocks up 0.9% in late deals, and Shanghai shares adding 0.6%.

Greenback slides

The

dollar

, meanwhile, fell again, to its lowest for nearly three years, since August 2008, against a basket of currencies.

That makes dollar-denominated assets such as many agricultural commodities cheaper for buyers in other currencies. (After all, with a reading below 74 against the basket, the dollar's discount to whenever the index was started has topped one-quarter.)

So corn managed a 0.5% rise to $7.36 ½ a bushel for May as of 07:30 GMT (08:30 UK time), with the new crop December lot adding 0.8% to $6.60 ½ a bushel.

And

wheat

- for which dryness concerns in China, Europe, the US, Western Australia among others are still alive, besides the concerns for the impact of damp on spring sowings in the northern US and Canada – added 0.4% to $7.88 a bushel for May in Chicago.

Kansas's May lot added 0.6% to $9.25 ¾ a bushel for May, with Minneapolis spring wheat adding 0.6% to $9.43 ¾ a bushel.

China factor

Soybeans

maintained their penchant for low volatility, easing 0.75 cents to $13.57 a bushel for May delivery, feeling some pressure from the South American harvest and a dearth of demand from China, the biggest importer.

Meanwhile,

cotton

for July shed 1.3% to 164.84 cents a pound, a ninth negative close in 11 sessions on the agenda amid talk of waning Chinese imports of the fibre too.

The new crop December lot edged 0.2% higher to 129.00 cents a pound, supported by talk of lower-than-expected Chinese sowings (it is the top grower, consumer and importer of the fibre) besides the dry weather threatening the southern US cotton districts.

Data later

As for later, besides any changes in the weather outlook, weekly US export sales data could have a big part in setting the tone of trading.

Wheat sales are expected around last week's 545,000 tonnes, with corn's viewed, at best, as matching the last figure of 1.1m tonnes, but soybean sales seeing as seeing a big improvement from 79,400 tonnes, to 200,000-400,000 tonnes.

Options expiry may also be a factor, seen as drawing May soybeans into a range of $13.40-60, and corn $7.40-60.

After the close, US farm officials will unveil the latest cattle on feed report, which is expected to show a 4.0% rise in placements on feedlots last month.

By Agrimoney.com

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