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Morning markets: soybeans and palm lead the pack

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The dollar under pressure, crops in demand.

Chicago had a familiar feel in early deals on Wednesday as the weaker greenback raised hopes of brisk demand for US exports, including agricultural commodities.

Soybeans had the extra help of a hot weather spell in US growing regions just as the crop is entering its crucial podsetting stage.

August beans stood at $11.79 at 06:30 GMT, up 14 cents on the day and within striking range of the four-week high of 11.90 ½ a bushel touched on Tuesday. New crop contracts showed similar gains.

Outstanding fears

Still, there were pockets of concern in the market. Some traders believe the hotter spell will accelerate the development of a backward crop, allowing farmers to get the crop off the field earlier and so reducing weather risk, in terms of autumn frost.

Soil moisture content will be a big factor in how the crop fares for now.

Meanwhile, China holds the third round of its soybean auction on Wednesday, amid rising expectations that this time some may sell.

Tree stress

Kuala Lumpur palm oil kept up with soybeans, with the benchmark October contract closing the morning session on Bursa Malaysia's Derivatives Exchange up 1.5% at 2,339 ringgit a tonne.

Besides being drawn higher by soybeans – it is a rival in many uses to soyoil – palm oil has been helped by firm demand prompted by the Asian holiday season, with fears for production for Malaysia's Sabah state now rising too.

Biological tree stress, prompted by rich harvests last year, coupled with heavy rains around the turn of the year have dimmed output hopes in Sabah, which produces about one third of all Malaysian palm oil.

Chicago grains, however, lagged, with corn, which has done a reasonable job of keeping up with beans, up 0.5 cents at 3.55 a bushel for September delivery.

Wheat for September added 2.25 cents to $5.44 ½ a bushel.


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