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Morning markets: crops look ahead to holiday

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Caution beset crop markets on Friday ahead of a long week end in the US, but it was trading volumes rather than prices which suffered.

The worst of the squall in external markets, which sent prices of many food commodities lower on Thursday, appeared to have passed overnight.

Oil was back on the rise, with New York light crude for July up $0.41 at $61.46 a barrel at 06:15 GMT, and Brent crude returning back above $60 a barrel, adding $0.47 to $60.40 a barrel.

While Tokyo shares closed down 0.4%, that represented a firm recovery after they opened down 1.2%.

And US commodities had the extra impetus of a weakening dollar, which hit a five-month low against a basket of major currencies.

The reason widely reported is that traders are concerned that Standard & Poor's may repeat to the US the downgrade threat it issued to UK state debt on Thursday. Nonetheless, sterling itself has risen 4.5% this week.

Making headway

Still, Chicago contracts didn't ask questions, with wheat making the most headway in Asian trading hours as Thursday's strong export data at last fed through to affect sentiment.

July wheat added 6.75 cents to $600 ¼ a bushel, but volumes were weak, at less than 1,200 trades.

Corn staged some recovery too, up 1.5 cents at $4.25 ½ a bushel for the July contract, with similar rises for new crop contracts.

And soybeans added 1.5 cents to $11.76 ½ a bushel for July, not far off the seven-month intraday high set on Wednesday.

"Across the board commodity markets are supported by the ongoing weakness in the dollar," Brett Cooper, a trader with MF Global Australia, told Reuters, the news agency.

"Supporting beans is probably weekly export sales numbers, which were well above expectations."

'Bit overdone'

Soybeans helped palm oil too, which recovered some of the ground lost on Thursday.

"Yesterday's fall was a bit overdone more on technical basis. The market is up a bit today because external factors were supportive," a Kuala Lumpur trader said.

Bursa Malaysia's benchmark August contract added 14 ringgit to 2,513 ringgit a tonne in the morning session.

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