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Morning markets: wheat ticks up in nervous trade

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Wheat looked to break its losing streak, starting off on a positive note, amid calm trading for crops ahead of a potential storm later when the US Department of Agriculture unveils its latest monthly report.

With the dollar calm, and oil marginally ahead, two beasts which dogged crops in the last session were quiet.

Nonetheless, investors were largely standing clear, besides some position-covering, given the prospect of Washington's latest global crop supply and demand report, a key feature of the commodities calendar.

Spread bet

The report is actually deemed to have little impact on wheat, making marginal adjustments to US inventory estimates.

However, given that speculators are short of Chicago wheat, which has been the butt of many a long-short trade with corn in the last few days, position covering was likely to be a positive for prices.

Soon-to-expire December wheat gained 3.5 cents to $5.18 ½ a bushel at 07:45 GMT in notably thin volumes, even for a day with a USDA report, with the better-traded March lot up 2.25 cents at $5.37 ½ a bushel.


Corn, meanwhile, was little changed, ahead of a USDA report expected to make a modest upgrade to US inventory estimates.

The December contract was 0.25 cents lower at $3.67 ¾ a bushel, with the March lot unchanged at $3.83 ½ a bushel.

The snow storm which assailed the Midwest, halting its delayed corn harvest, had pretty much abated in most parts by Thursday, with just light snow forecast.

Meteorlogix's round-up was unchanged: "Winter weather brought harvest to a halt and any remaining harvest may not occur until spring."

'Market may be in trouble'

Soybeans, meanwhile, continued to head lower, despite rumours that China, the world's biggest soybean importer, was looking to use the drop in prices to make purchases.

"China is rumoured to be interested in booking another two-to-four cargos of beans on this break," Kevin Kjorsvik at broker Benson Quinn Commodities, said.

The trouble was something of a general sell-off, he added. "The outside markets are seeing some investors liquidate their long positions on better year-end outlooks for the US dollar, and beans are feeling the repercussions just like gold and crude oil are.

"With the investors now turned sellers after speculated to be buyers earlier in the month the market may be in some trouble until the holidays."

This is when a fresh month, and year, is expected to bring a new line of fund money. Still, markets heard that one last week, to no avail.

Soybeans, likely to be the key feature of the USDA report later, stood 1.75 cents lower at $10.26 ¾ a bushel for January.

Palm data

Palm oil was also lower, despite official data showing a 2.0% drop in Malaysia's stocks last month.

Traders had expected a 2.8% rise.

Continued losses in the benchmark February contract, which stood 11 ringgit lower at 2,514 ringgit a tonne, were blamed on worries ahead of a key USDA report for soybeans, maker of soyoil, palm's major rival in the vegetable oils market.


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