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Commodities struggle against falling oil

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Agricultural commodities negotiated the bearish drag of a weak oil market and an array of bullish influences with mixed success, with palm oil and soybeans among the main gainers.

Crude prices continued to suffer from Friday's International Energy Agency forecast that global demand for oil for fall by 2.4m barrels a day this year. Brent crude stood 3.3% lower at $52.29 a barrel at 16:45 GMT, with New York crude off 3.8% at $50.24 a barrel.

A weak day for Wall Street shares presented a further hurdle for commodity bulls.

Nonetheless, Bursa Malaysia's benchmark palm oil contract overcame mid-afternoon blues to close at a fresh seven-month high of 2,335 ringgit a tonne, up 36 ringgit on the day, albeit well below a morning high of 2,385 a tonne. Palm oil has gained 40% this year.

Bullish data

The contract was helped by a batch of bullish data on Friday, including data from Societe Generale de Surveillance showing that exports of Malaysian palm oil products rose 3.7% in the first 10 days of April, compared with the previous 10 days, with rival cargo surveyor Intertek Testing reporting an 8% rise over the same period.

Friday's much-awaited palm oil stocks report from the Malaysian Palm Oil Board came out in line with analysts' forecasts at 1.364m tonnes, the lowest since June 2007.

"Six months ago, palm stock was 2m tonnnes. Now it is just 1.36m tonnes. That makes people a bit worried about a slowdown in production," a Kuala Lumpur-based brokerage told Reuters.

Weather change

Many US traded commodities were helped by a fall in the US dollar. New York orange juice added a further 1.6% to close at a fresh five-month high of 84.50 cents a pound. And Chicago soybeans stood 14.5 cents up at $10.21 ¼ a bushel, with weather forecasts also cheering bulls.

"Some forecasters are calling for a pattern change in the Midwest to drier conditions starting next week," said Vic Lespinasse at GrainAnalyst.com.

"If correct... it would also be considered bearish new crop corn and bullish new crop beans (December and November contracts, respectively) as farmers would then be more likely to plant more corn and less beans than would be the case if the weather stayed wet."

Wheat was also on the winners' board, with weekly US export inspection data showing shipments at a robust 20.7m bushels.

However, corn, a leading stock for biofuel, proved unable to shrug off the crude market's decline and stood 1.75 cents down at $3.88 ½ a bushel.

Elsewhere, New York cocoa ended $1 lower at $2,557 a tonne, and coffee off 3.8% at $1.1480 a pound.

London markets were closed for the Easter Monday holiday.

By Mike Verdin

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