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Morning markets: crops resume normal service

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Agricultural commodities resumed something like normal service on Wednesday amid calm in other financial markets, with palm oil and soybeans returning to the limelight.

Soybean contracts were the prime movers after Oil World, the German oilseed analysis business, took its turn to cut its forecast for Argentine production this year because of dry weather. Oil World reduced its estimate by 3m tonnes to 37m tonnes, stocking fears of a tight market while China remains a strong buyer.

Chicago's benchmark May soybean contract stood 3 cents higher at $10.41 a bushel at 06:00 GMT after touching $10.50 a bushel earlier.

"Soybean yields in South American are not getting any better, they are getting worse," Paul McKay, a director at Commodity Broking Services in Australia, told Reuters.

"China's soy demand hasn't showed any signs of slowing down at this point. And less soybeans from Argentina means more will be shipped out of the US and that is going to place more pressure on the ending stocks."

Russian imports drop

Palm oil was higher too, with Bursa Malaysia's benchmark July contract 25 ringgit higher at 2,460 ringgit a tonne. However, it too was below a day high of 2,474 ringgit amid news that Russia, albeit a relatively small buyer, may halve imports of palm oil this year.

Among cereals, Chicago's May wheat contract was 1 cent higher at $5.10 ½ a bushel, with Monday's US planting report, which highlighted weather delays to spring wheat and lingering drought damage to winter crops, still providing some support.

The report provided a little lift to May corn too, which stood 1 cent higher at $3.75 a bushel.

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