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Morning markets: crop bulls regain upper hand

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Soybeans dusted themselves off from a tussle with profit-takers to join other main agricultural commodities in posting gains in early trade on Wednesday.

Beans had a mixed Tuesday while investors examined a US Department of Agriculture report confirming tighter near-term stocks but strong production next year.

However, a night's sleep appeared to have inspired investors to look on the bullish side. Chicago's July contract added 1.6% to $11.35 a bushel at 06:15 GMT, with some further ahead beans playing catch up by posting even stronger gains.

The March 2010 contract, for instance, was up 1.8% at $10 a bushel on the nose.

Prickly heat

A strong oil price may also have played its part, with New York crude for June up $0.90 at $59.75 a barrel, fuelled by data showing a surprise fall in US inventories last week. Meanwhile, Tokyo shares closed up 0.5%.

And palm oil, soybeans' partner in its recent bull run, added 2.2% to 2,784 ringgit a tonne in morning trade in Malaysia as investors fretted some more about whether production was up to meeting China's strong demand for vegetable oil crops.

"Hot weather seems to be a problem for vegetable oils and China buying is not helping, " a trader told Reuters, the news agency.

"Prices in the world complexes have started to rally again."

Corn rises

Chicago corn, meanwhile, piled on further gains to those made on Tuesday after the USDA forecast a 28% drop in US stocks.

July corn added 1.2% to $4.32 ¾ a bushel, a new four-month high, with some new crop contract making even greater headway. December, for instance, rose 1.5% to $454 ½ a bushel.

Wheat made more modest headway. But then the USDA lumbered this grain with the prospect of bumper stocks at the end of 2009-10, despite a weak US harvest.

July wheat added 4.75 cents to $5.97 ½ a bushel, with later contracts also making headway as far as September 2010, which gave back 0.5 cents to $6.84 a bushel.

By Mike Verdin

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