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Morning markets: planting difficulties revive crop prices

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couldn't quite recover winning ways in early deals on Wednesday, with Russia's return to grain exports weighing.

But the other Chicago majors did, helped by the latest weekly report on US crops showing farmers still struggling to get crops into the ground, with what has been planted and emerged not in the best of condition.

With the easier acres already sown, the pace of


seedings slowed, with 7% of the crop, some 6.5m acres, planted last week to take the total to 86%, US Department of Agriculture data showed.

That's still behind the 95% typically seeded by now, and in some of the eastern Corn Belt the pace was still pitiful. Ohio farmers had just 19% of their corn planted, compared with 93% typically by now. Indiana, at 59% finished, was behind the usual pace too.

'Neutral' rating

The rating of the national crop was below par too, at 63% in "good" or excellent" condition compared with 76% a year ago, if in line with market expectations.

"Overall the rating could be considered neutral," Benson Quinn Commodities said, adding that it was "difficult to rate something that is still in the bag or hasn't come out of the ground".

So Chicago corn rebounded 0.7% to $7.52 ½ a bushel for July and 0.5% to $6.76 ¼ a bushel for the new crop December lot, with gains restrained by the prospect of some catch up this week.

"Weather looks favourable for Indiana and Ohio farmers to at least get into the fields this week," Mike Mawdsley at Market 1 said.

Slow soy

That said, there is only days left before growers in the eastern Corn Belt can give up on seedings and opt for insurance instead.



, which are later seeded, do not appear the convenient alternative they sometimes do, with just 51% of the US crop planted, compared with 71% usually by now, and behind market forecasts of a 60% figure.

"Rains continue to hamper planting across the northern tier while central states were focused on getting the corn in ahead of preventive planting dates," Kim Rugel, at Benson Quinn, said,

"Weather forecasts do improve with bigger windows between rain events but the northern tier is still forecast for above normal rains."

Soybeans for July added 0.4% to $13.82 a bushel, with the new crop November contract gaining 0.4% to $13.69 ¼ a bushel.

Rain where it's needed

Sure, wheat data was hardly upbeat either, with sowings of the spring crop at 68%, compared with 95% typically by now, held back by the poor pace in top growing states Montana and North Dakota.

And parched hard red winter wheat crops were refreshed a little by recent rains, but not much. The overall winter wheat crop was rated 33% in good or excellent health, a rise of 1 point week on week but way below last year's 65% figure.

But such news was not a match for the prospect of Russia's return to grain exports, as of July 1, and forecasts of rain for areas of Europe where dryness has been a problem.

"A lack of moisture continues to stress the French wheat and rapeseed crops and reduce yields," Australia & New Zealand Bank said.

"However rainfall beginning on the weekend is forecast across much of France and Germany. In particular, this rainfall is timely for Germany, which is a later crop than in France, helping to limit yield declines at this stage."

'Concerns building'

Beyond Chicago, New York


followed up limit-up closes to the last session - on the dry weather in Texas, the top US producing state - with a mixed performance this time.

The July lot continued its rise, adding 2.4% to 162.44 cents a pound, while the new crop December contract eased 0.7% to 134.58 cents a pound.

"Concerns continue to build over the crop in Texas, with the six-to-10 day outlook forecasting below-average rainfall coupled with above-average temperatures," ANZ said.

But, in Kuala Lumpur,

palm oil

extended losses, shedding 0.4% to 3,378 ringgit a tonne.

Chinese data

As for later on, it is not just weather forecasts that investors should have their eye on.

First trading days of the month often bring some volatility (as do month ends) as funds take fresh positions, just as they by repute close them at month ends.

And there is a little weakness in some other commodity markets, such as


, following Chinese data showing manufacturing slowing, but not necessarily by enough to ward off fears of a further tightening in monetary policy.

The economics of China, as a huge buyer of raw materials, including cotton and soybeans, tend ot have a large impact on commodity markets.


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