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Morning markets: India monsoon fears lift palm oil

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Talk of a disappointing Indian monsoon helped palm oil jump 2.9%, well clear of Chicago crops which got off to a sluggish start on Thursday.

Official forecasters said that the monsoon would, for the first time in four years, provide below-average rainfall, a warning which has already sent sugar to its highest for nearly three years on talk of stronger Indian demand for imports.

The prospect of India – historically the world's second largest palm importer after China - buying more foreign palm oil too helped the benchmark September contract on the Bursa Malaysia Derivatives Exchange gain 65 ringgit to 2,315 ringgit a tonne in the morning session.

"Currently Malaysian palm oil exports are within expectations, but investors are short-covering on the possibility of more purchases from India," said a trader told Reuters, the news agency.

Robust weekly export data presented a further spur, with Intertek Testing Services, the cargo surveyor, reporting shipments up 3.9% at 1.02m tonnes in the first 25 days of June.

Wheat bounces off low

Chicago crops were also trading in positive territory in electronic trading at 06:15 GMT, recovering from a weak start which sent wheat to $5.35 ¼ a bushel, its lowest since early May.

Good weather for areas harvesting the winter wheat crop, and talk of better-than-expected yields in Kansas, the biggest US wheat state, have kept a lid on investor enthusiasm.

However, it was helped by a weakening in the dollar, which makes commodities traded in dollars appear cheaper to buyers paying in other currencies.

July wheat stood 1.25 cents higher at $5.41 a bushel.

Corn revives

Corn also regained early losses to stand 1 cent up at $3.87 ½ a bushel, with soybeans adding 3 cents to $11.88 a bushel.

These crops too have the prospect of favourable weather, with temperatures rising in the key growing region of the US Midwest, helping seedlings.

On external markets, New York crude added $0.22 to $68.89 a barrel, while Tokyo's Nikkei share index closed up 2.2%, its best performance for more than a month.

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