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Evening markets: sugar and palm oil sweeten

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Palm oil reawoke in better form after a lunchtime siesta to manage a fresh eight-month high, although sugar made the biggest splash, as Friday proved fickle in her blessings for agricultural commodities.

A revival in oil prices was one reason for the change in fortunes, after forecast-beating results from a clutch of US companies including American Express and Ford, revived hopes for the global economy. New York crude had bounced 3.7% above $51.43 a barrel by 17:15 GMT.

Palm oil, a biodiesel feedstock, was a natural beneficiary and shook off earlier reluctance to crawl 5 ringgit higher by the close to 2,585 ringgit per tonne for Bursa Malaysia's benchmark July contract. The contract touched 2,535 ringgit earlier in the day.

Jumping beans

The revival helped soybeans, an alternative to palm oil for purposes such as vegetable oil, to put in a better showing too. Reports of further shipments to China, plus a weaker dollar, only supported prices. Chicago's May contract was 4.25 cents higher at $10.41 ¾ a bushel.

That stole some thunder from wheat which lost its early mojo to stand flat at $5.29 ¼ for Chicago's May contract. While sowing weather continues to look unhelpful to US spring wheat farmers, prospects for Canada's crop were bolstered by official figures showing a rise in planting intentions.

For once, it was London wheat which did the best adding £1.70 to £110.50 a tonne for May delivery. But that was largely down to a sharp drop in sterling against most currencies – including the euro. Paris wheat slipped E4.25 to E141.50 a tonne.

Corn, as has become typical of late, was the weakest of the bunch, down a quarter of a cent to $5.29 a bushel. Sure, continued wet weather in planting districts should have been helpful to corn. But fuel restrictions passed by California, which are expected to restrict corn-based ethanol use, were definitely not.

Sugar stirred

Investors may well wish they had put their money instead into sugar, which soared on talk that India, the biggest consumer of the white stuff, will increase exports to make up for a fall in its own production.

Raw sugar for July delivery was 40 cents, or 2.9%, higher at $14.07 a pound, a six month high, after touching $14.19 earlier. London sugar settled up 2.3% at $418.80 a tonne.

India's shortage is reportedly severe enough to prompt sugar refiners to lobby for trade restrictions lifted earlier this month to remain lifted until the autumn.

However, trading was not so sweet for cocoa, which edged 0.5% lower in New York and 1.0% down in London as benign weather in the Ivory Coast, the main growing country, and signs of flagging demand for chocolate sidelined bulls.

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