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Morning markets: soybeans ease after Brazil denies trade ban

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"Lots of rumours but no confirmation on anything. Monday could be an exciting day," Mike Mawdsley at Market 1 mused over the weekend.

But the fireworks had yet to start as of 08:50 UK time (02:50 Chicago time), in part because one of the rumours, of a ban by Brazil of soybean exports, was denied.

Brazil's farm ministry had not taken "any decision which would restrict soy exports", a spokesperson said.

That took some of the oomph out of Chicago soybean futures, which closed the last session at a seven-month high in part because of talk of Brazilian trade restrictions.

Soybeans for May shed 0.2% to $14.43 ¾ a bushel, if prevented from a steeper decline by prices on the Dalian exchange in China, the top importer of the oilseed, where the September lot added 0.5% to 4,559 yuan a tonne.

US snowfall

New crop November soybeans eased 0.1% to $13.54 ¼ a bushel, losing some ground over their rival for US spring sowings,

corn

, which stood unchanged at $5.36 ¾ a bushel for December delivery.

The weekend looks to have been an OK one for US farmers seeding their corn, which is earlier planted than soybeans, promoting ideas that a rapid sowing pace with favour the grain over the oilseed in acreage plans, and so Chicago prices need not.

While there was heavy rain on Saturday, it was restricted to the likes of Georgia, the Carolina and Virginia, which are not major corn-growing states.

But it is being followed by the white stuff, if not too in main growing areas. "This low will bring snow to the mountains of northern west Virginia, southern Pennsylvania and western New York State overnight into Monday", WxRisk.com said.

'Quiet weather week'

Iowa, the top corn state, received "moderate" rain on Saturday.

And the forecast does not look set to throw up anything for now to disrupt plantings.

"This is going to be a fairly quiet weather week across most of the Plains, Midwest and deep South,"WxRisk.com said, adding that the Midwest may prove "rather cool for late April through midweek".

Still, if the weather did not offer a huge amount of direction, rumours are still floating around about those corn purchases by China, whose lack of confirmation on Friday prompted a slump in prices in the last session.

Truth to many of the rumours'

"I believe there is truth to many of the rumours about China shopping for corn, but I do not expect the product to be traded in a fashion that requires it be reported/ announced," Brian Henry at Benson Quinn Commodities said.

That could mean, for instance, China buying in smaller purchase sizes.

Separately, a spokesman for China's Sinograin told Reuters that "we are ready to buy, and the volume depends a lot on prices.

"Import contracts may have been signed, but I have not been informed."

Old crop May corn added 0.3% to $6.14 ½ a bushel.

'Sharp short-covering rally'

Wheat

, which has largely been a follower of corn of late, restricted from independent moves by huge inventories, managed at least to stay unchanged, at $6.15 ¾ a bushel for May delivery.

India issued a reminder of the huge supplies, estimating its own wheat harvest this year at a record 90.2m tonnes.

But mitigating against price falls were, besides corn, the relative competitiveness of the grain, and the large net short positions investors already hold in the grain in Chicago.

"Down at these levels our soft red winter wheat is about the cheapest grain on the planet," Mr Mawdsley said.

"Funds are short, thus any weather issue in the world could bring a quick, sharp short-covering rally."

Managed money, a proxy for speculators, was net short 52,340 lots in Chicago wheat, near a record high, as of last Tuesday, regulatory data released late on Friday showed.

Signally, managed money, in a rare move, turned net short of Kansas hard red winter wheat too, by 1,495 contracts.

Kansas wheat for May was 0.2% higher at $6.27 ¼ a bushel.

'Large cloud still exists'

Among soft commodities, raw sugar attempted a rebound, following last week's falls to a 10-month low, as the prospect of extra Indian exports trumped growing concerns over Brazil's forthcoming crushing season.

But could Brazil concerns yet win out?

"Prices could find some support from Friday's report that Canaplan, a consultancy, are projecting Brazil's Centre South cane production at 470m tonnes," Paul Deane at Australia & New Zealand Bank said.

"This is 40m tonnes below [cane industry group] Unica's first season forecast released just a week ago, and adds weight that a large cloud still exists around how much damage has occurred from dryness in the region over the last six months."

Besides speculators have already sold down heavily in the sweetener, with their net long position slumping 39,000 contract to less than 70,000 lots in the latest week.

New York's May contract added 1.0% to 22.16 cents a pound, with the better-traded July lot gaining 0.8% to 22.15 cents a pound.

By Agrimoney.com

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