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08/02/11 -- Soybeans:

Soybeans closed around 10-11c firmer, with meal up USD3.30/4.60 and soyoil up 36-38 points. Early ideas that China's latest interest rate hike would adversely affect demand for beans gave way to thoughts of a further tightening in soybean ending stocks by the USDA tomorrow. The trade is maybe also conscious that two previous rate increases have done nothing toi curb demand for soybeans. The USDA may increase it's estimate for Brazilian bean production tomorrow, but that could be offset by a corresponding decrease in Argentina.


Corn finished mixed, a cent or so easier to 2-3c firmer. Some light liquidation may have taken place ahead of tomorrow's USDA report. Funds were estimated to have sold around 5,000 contracts on the day. Analysts are estimating tomorrows corn ending stocks down around 10 million bushels on last month. Spillover support from wheat helped minimise losses. With futures having posted successive 30-month highs in recent sessions then maybe it was time to take some money off the table ahead of tomorrow's report.


CBOT wheat ended 15-19c higher, with Kansas and MGEX wheat up 18-19c. CBOT wheat set fresh 2 1/2 year highs. Jordan bought 100,000 MT of US wheat to add to Egypt's purchase earlier in the week. Plenty more tenders are kicking around, with US wheat likely to feature prominently. Chinese wheat may have a problem coming up: "key wheat area are in the throes of drought; spotty showers in the past 7 days have brought no real relief," say Martell Crop Projections.