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Morning markets: dollar props up farm commodities

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Crop began the week muted, with a fall in the dollar helping wheat and soybeans make some headway, but not much.

The dollar slipped 0.3% against a basket of currencies after a meeting of ministers from the G7 group of industrialised nations at the weekend yielded no surprises, so encouraging a little more risk-taking among investors.

The greenback, whose declines make US exports such as crops more competitive, has since economic hardship set in been viewed as something of a safe haven.

Consolidation?

The move helped Chicago wheat pick up 0.25 cents to $4.42 a bushel for December delivery.

While hardly a startling move, which failed to retrieve for wheat anything like the ground lost on Friday, the grain remains above a two-year low of $4.25 ¼ a bushel hit last month.

Many investors are hoping the current spell represents something of a consolidation, after a steep decline prompted by forecasts of bumper global supplies.

Beans recover

Soybeans, meanwhile, picked up 1.75 cents to $8.86 ¾ a bushel for December delivery but not before setting a fresh six-month low of $8.79 ¾ a bushel.

The crop was hurt last week by reports forecasting that fresh US crop data due on Friday will show a big rise in harvest estimates.

Also, the start of harvesting has added some pressure to the market.

Corn lost 2.25 cents to $3.31 ¼ a bushel, in the absence of forecasts of a frost to damage the crop.

Short-covering

In Kuala Lumpur, palm oil fared better, rebounding 0.6% although trading remained thin while China, the world's biggest buyer of the commodity, continued to celebrate its National Day holiday.

Traders credited the rise in the main to the covering of short positions, after a fall in prices approaching 20% since mid-August.

Benchmark December palm oil closed the morning session on the Bursa Malaysia Derivative Exchange settled up 13 ringgit to 2,050 ringgit a tonne.

By Agrimoney.com

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