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Morning markets: crops nervous ahead of US report

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Chicago crops firmed in electronic trading on Friday, but traders said the rise reflected position covering ahead of a key US report due later rather than any real appetite by investors.

All near-term contracts were higher. July corn added 4 cents to $3.47 ½ a bushel, with soybeans up 4.5 cents at $11.15 a bushel and wheat bringing up the rear, up 0.25 cents at $4.94 ½ a bushel.

Soybeans and corn were ahead on better-traded forward lots too. New crop November beans, for instance, added 6 cents to $9.22 a bushel, with December corn gaining 3.5 cents at $3.43 ½ a bushel.

Forward wheat contracts were easier, but not by much.

'Technical bounce'

But traders urged caution about reading too much into movements ahead of the US Department of Agriculture's latest world crop supply and demand estimates, due at 12:30 GMT.

"It is more of a technical bounce," Tim Glass, global head of commodities at National Australia Bank, told Reuters, the news agency.

Nonetheless, Mr Glass remained optimistic that a recovery in prices was on its way, with corn and wheat futures approaching levels which are, in his view, oversold.

"There's nothing to say that this market can't bounce 20 or 30 cents as people want to close out and take profit on shorts - there's been a lot of new shorts that have been riding this thing down,"

'Some hope now'

Traders viewed a modest improvement in palm oil as more convincing, following data showing a 45% rise in Malaysian exports of the vegetable oil, and associated product.

Intertek Testing Services, the cargo surveyor, estimated shipments at to 419,000 tonnes for the first 10 days of July, up from 289,000 a month before.

Benchmark September palm oil closed the morning session on Bursa Malaysia's Derivatives Exchange up 9 ringgit at 2,056 ringgit per tonne.

And that was before data from the Malaysian Palm Oil board showing a lower-than-expected rise in stocks.

"There is some hope now," a trader said.

"The June palm oil stocks report that came out after the market closed shows a less impressive increase and prices should recover more."

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