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Commezbank Says positive in financial market

January 11, 2012

Commerzbank says positive mood in financial market will send good sentiment on Agri commodities. Traders feel South africa Soy crop likely to suffer seriously from drought.Brazil crop Forecaster Conab said rainfall in major soy region is expected to remain below average & will  be poorly disturbed for next two months. Traders expect USDA will cut forecast for soy seed 2011 output for Brazil & Argentina due  to hot , dry weather & some cut is also expected in US too. 

Bullish Scenario developed in South America as soy Area got low rains which is insufficient for crops . Brazil Final Soy crops Estimate likely in Feb.Argentina Agriculture minister may declare Emergency As  disaster as three major states need 150 mm of rains to support crops and only 20-25 mm is expected or no rains at all.South american Soy probably to limit fall till march But KLC to fall as production peaks.

South America facing Hot temperature (38-42 degrees )& chance for rains very less till week end . If no sufficient rains , standing crops to get affected.35l hectare of soy seed  area is still waiting for sowing in Argentina . Brazil dryness spreads in two more states , where government already declared emergency due to drought.

Agri-Commodities prices will not fall much , unless Economic conditions turns bad . Weather pattern that disrupt to supply favor CPO , Soy & Rubber.Long term bull run in Agriculture commodities to remain due to rising cosumption but may not test highs . More upside seen in soy , Corn , Wheat & Sugar. 

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