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Morning markets: beans and palm dodge BoA blight

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Soybeans and palm oil, once again, volunteered to carry the banner for agricultural commodities on Wednesday, in a market overshadowed by news of Bank of America's capital shortage.

Reports that US government capital test results show that BoA requires $34bn - equivalent to nearly half the bank's market capitalisation – knocked some of the stuffing out of financial markets.

Asian shares were mixed at 06:15 GMT, with oil hovering around opening levels. New York crude was 3 cents higher at $53.87 a barrel, with Brent crude for June off 4 cents at $54.08 a barrel.

Supply fears

Soybeans and palm oil, however, were helped out of the doldrums by a report from Oil World, the German-based analysis group.

For palm oil, Oil World's comments that low stocks are likely to keep prices firm helped Bursa Malaysia's July contract add 28 ringgit to 2,653 ringgit a tonne, within striking distance of Monday's 2,701-a-tonne high.

For soybeans, the report helped by taking its turn to cut its forecast for Argentina's harvest, which Oil World reckon will now come in at 34.5m tonnes, down 2m tonnes from its previous estimate.

Chicago May soybeans were 9.5 cents higher at $11.25 ½ a bushel, with August up 12 cents at $10.73 ½ and November 7.5 cents up at $9.68 a bushel.

Mixed wheat

It was a different story for wheat, however, which saw some gains for distant contracts but slipped nearby.

While September 2010 wheat was 0.75 cents up at $6.45 ¾ a bushel, and the March 2010 contract a respectable 2.75 cents higher at 6.18 ¼ a bushel, wheat for this month was 4.5 cents lower at $5.37 a bushel.

Corn was modestly weak all round, with the May contract down 1.5 cents at $3.97 a bushel and December off 0.5 cents at $4.24 ½ a bushel.

By Mike Verdin

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