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Morning markets: crops get back on their feet

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Chicago's correction-stunned food commodities dusted themselves off on Thursday, as lower prices tempted funds back in, but Malaysian palm oil remained in the doldrums.

Traders might not have expected too much headway in food commodities given the round of falls in equity markets – Tokyo shares were the latest to post a negative close, of 0.75% - and weaker oil.

New York crude for July added a further $0.10 to Wednesday's 3% losses, standing at $66.02 a barrel at 06:08 GMT.

That was enough to sour the mood in Kuala Lumpur, where palm oil looked set for its third successive day of decline.

Bursa Malaysia's benchmark August contract ended the morning session down 45 ringgit at 2,530 ringgit a tonne.

Revived interest

Chicago crops recovered some of the ground lost on Wednesday when a warning by Ben Bernanke, the head of the Federal Reserve, over the US economy sent financial markets tumbling.

Wheat - which closed down 7.8%, nearly at its daily 60 cent limit – recovered 5 cents, or 0.8%, to $6.22 ½ a bushel for July delivery. Forward contracts also gained modest ground.

That was in line with the rise in corn, which edged 3.5 cents, or 0.8%, up to $4.36 a bushel, narrowly ahead of new crop contracts.

Soybeans were the best performer, adding 13.25 cents, or 1.1%, to $11.95 ¼ a bushel.

"I do believe commodities across the board are going a lot higher," Akhilesh Kamkolkar, head of futures at Halifax Investment Services Ltd in Sydney, told Reuters, the news agency.

"People were waiting for a pullback in some of these commodities and they did get it overnight, so they are starting to come back in."

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