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Morning markets: corn and palm off to poor start

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Farm commodities began this week where they off the last one – in poor form, with lower prices failing to tempt bargain hunters in even as corn drifted further below $4 a bushel.

Other financial markets didn't help. The dollar was modestly stronger, adding 0.2% to $1.3909 against the euro, amidst some uncertainty ahead of a meeting on Tuesday and Wednesday of the US Federal Reserve's interest rate-setting committee.

While the committee is not expected to raise rates, any comments on America's economic outlook and the rise in yields on US government bonds will be keenly analysed.

Oil too remained on uncertain form, following its 2.5% drop on Friday on expectations that America has ample petrol supplies.

New York crude for June stood 1 cent lower at $69.54 a barrel at 06:10 GMT.

Corn scorned

Without much help from external movements, corn felt the full impact of warm and wet weather in the US Midwest, a key growing district, viewed as supporting yields for crops already sown.

Many investors have been banking on a spell of poor weather, coupled with prospects of thin stocks, sending corn prices spiking.

But Chicago's July contract stood 5.5 cents lower at $3.93 ¾ a bushel, with new crop contracts lining up behind for similar punishment.

The contract on Friday closed below $4 a bushel for the first time in six weeks.

'Bit of a stand-off'

Wheat also slipped, losing 3.25 cents to $5.52 a bushel, a loss repeated in forward contracts.

And while July soybeans made some ground, gaining 3.75 cents to $11.82 ¾ a bushel, the increase was not wholly convincing. New crop contracts lost ground, with November sliding below $10 a bushel at one point before recovering to stand 2 cents lower at $10.04 a bushel.

Some traders said there was a risk of the market remaining somewhat directionless until the US Department of Agriculture on June 30 releases updated data on crop plantings.

Estimates from Informa Economics on Friday pegged soybean acreages slightly higher than the US had predicted as farmers switched out of corn, whose plantings were delayed.

"We're in a bit of a stand-off at the moment because of the USDA report on June 30 where people will get some idea of how many acres soybeans have bought back from corn," Tim Glass, global head of commodities at National Australia Bank, told Reuters, the news agency.

"It does give the market some sort of line in the sand."

Palm falls

In Kuala Lumpur, Malaysian palm oil was also weak, hitting an 10-week low of 2,225 ringgit a tonne at one point as forecasts of rising production and sagging exports continued to overshadow the market.

The benchmark September contract closed the morning session down 2.0% to 2,240 ringgit a tonne.

By Mike Verdin

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