08/11/2012 (Agrimoney.com) - One big question began being answered on Wednesday – how markets would react to Barack Obama being voted back in as US president.

Even with the Florida vote still being counted, Mr Obama had won 303 votes in the electoral college, ahead of the 270 needed to gain victory.

The impact on markets was a signal from futures that Wall Street shares will open a little weaker later on, although Asian stocks put in largely positive performances, and indeed closed up 0.7% in Sydney, while standing 0.6% up in Singapore in late deals.

Signally, the dollar eased 0.3%, which some took as a sign that an Obama victory would likely extend the tenure of Ben Bernanke as head of the Federal Reserve, and with it the likelihood of a relatively easy stance on monetary policy.

Others attributed the drop to ideas that Mr Obama's win perhaps signalled a lesser effort to boost economic growth than if his opponent, Mitt Romney, had been victorious.

'Concerns are real'

Whatever, a weaker dollar is helpful to prices of dollar-denominated assets by making them more affordable to buyers in other currencies.

And that helped some agricultural commodities overcome early weakness, notably wheat, which continued to gain on concerns over the poor start to US winter wheat seedlings, which official data show in the worst condition for the time of year since records began in 1985.

"Concerns about the poor start to the wheat crop are real," Mike Mawdsley at broker Market 1 said.

"US wheat could go into dormancy with the lowest rating on record. Thus wheat has the best fundamental news going for it at the moment."

EU export hopes too high?

Meanwhile, there is still a belief of more wheat export demand heading America's way, amid scepticism over the depth of European Union reserves, the initial default alternative to the now-scant former Soviet Union supplies.

"Some analysts believe the US Department of Agriculture's 2012-13 European Union wheat export forecast of 16.5m tonnes, on par with last year, is overstated given a 6m tonne-lower 2012 EU wheat crop," Richard Feltes at RJ O'Brien said.

"In any event, Paris wheat is making new highs, third world countries rarely buy out more than 60 days and there is no sign as yet that current wheat prices are curtailing consumption."

'First step towards establishing a rally'

This helped Chicago wheat 0.2% higher to $8.79 a bushel for December as of 09:00 Uk time (03:00 Chicago time), recovering from an early loss of nearly 1%, despite Luke Mathews at Commonwealth Bank of Australia playing down the impact to the quality of Australia's crop from the latest bout of harvest-time rain.

"Rain and thunderstorms passing over the east coast grain belt are likely to persist through to Friday," he said noting official forecasts of 15mm-50mm of rain for much of New South Wales and Queensland.

"Dry weather is forecast next week meaning normal harvest activities will quickly resume and grain quality impacts should be minimal."

The price gain helped further improve wheat's chart picture, with Brian Henry at Benson Quinn Commodities noting that a "a more supportive technical structure is developing".

He added: "It seems the wheat market has taken the first step towards establishing a rally as the technical picture is firming."

China imports question

Soybeans proved less certain about clinging onto positive territory too amid ideas that the USDA will, in Friday's Wasde report, raise its forecast for the US soybean crop.

But will extra demand soak up any extra production?

"Trade expects the USDA to offset production with larger export demand leaving ending stocks historically tight," Kim Rugel at Benson Quinn said.

However, there has been some disappointment over a dearth of orders from China showing up in the USDA's daily alerts system, at a time when feeble Chinese soybean crushing margins are raising some doubts over demand.

"We have been hearing about Chinese business for soybeans, but thus far none has been reported lately," Mr Mawdsley said, noting the impact of a dearth of sales announcements on Tuesday in slowing gains in the last session.

'Situation is rather alarming'

On the bullish side are further downgrades for South American crops, following the lead of Michael Cordonnier, at Soybean and Corn Advisor, last week.

Oil World cautioned that Argentina's crop, harvested early in 2013, may be 3m-6m tonnes below earlier forecasts of 55m-56m tonnes thanks to the rain which is slowing sowings.

"The situation is rather alarming in Argentina where an estimated 13m-16m hectares of agricultural land is either flooded or excessively wet at the moment," Oil World said.

"Although farmers will make every effort to sow soybeans even at a later time and with a reduced yield potential, it is still unclear what they will finally be able to accomplish."

Brazil rains

The German-based group cautioned over Brazil's harvest too, if rains do not arrive soon to water dry areas.

Signally Celeres left its forecast for the Brazilian soybean crop at 79m tonnes, 2m tonnes below the USDA figure.

"Weather has not been as detrimental to crop production but has delayed planting which is raising concern of early export shipments," Benson Quinn's Kim Rugel said.

However, with many areas of Brazil getting some rain, Chicago soybeans for January rose, but only by 0.25 cents to $15.15 ¾ a bushel.

Demand fears

Corn retained its position between its fellow grain wheat and fellow row crop soybeans and was, after all, the subject of its own Argentine crop downgrade, from Dr Cordonnier.

He cut his estimate by 3.5m tonnes to 22.5m tonnes, citing the excessive rains which have slowed sowings.

However, with US exports slow, and New Energy adding an ethanol plant in Indiana to those being mothballed because of low margins, demand remains of concern too.

December corn was 0.2% higher at $7.42 ¼ a bushel.

Palm rebounds

Still, for bigger gains it was, unusually, necessary to go to Kuala Lumpur, where palm oil rose 0.9% to 2,394 ringgit a tonne.

The vegetable oil was helped by bargain hunting encouraged by talk of rains in the region of Johor which could slow production and ease the build-up in stocks to a record high, which sank prices to a three-year low last month.

Still, greater direction will be taken from Malaysian Palm Oil Board data on Monday showing how inventories changed last month, with investors looking to cargo surveyor data on Saturday as an indication of export demand so far this month.