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Morning markets: crops tread cautiously higher

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Chicago crops trod higher on Tuesday, although traders were reluctant to read much more than technical adjustments into the gain ahead of key US data.

Indeed, many fundamental signals appeared negative, two provided by China.

On a macro level, Beijing reported lower-than-expected figures for factory output and investment, signalling that concerns remain for the economy that many observers are relying on to power the world out of recession.

Import drop

Talking crop-specifically, China's Ministry of Commerce reported that soybean imports for August are likely to drop to about 2m tonnes, from a monthly average of about 3m tonnes so far this year.

Still, some analysts, including those Commerzbank, had been warning about a drop in China's soybean imports.

And, even with weather looking positive for the US soybean crop, investors remained fixed on the prospect of the US Department of Agriculture's latest crop report on Wednesday, which is expected to show a small drop to official estimates for the soybean harvest.

Chicago's August beans contract stood 15.5 cents higher at $11.86 a bushel at 06:30 GMT, with November beans rocketing 19 cents to $10.29 a bushel.

$5-a-bushel barrier

Grains, which suffered last week, continued their revival from a poor performance last week, again with the USDA report looking the driving force.

September corn added 1.75 cents to $3.26 ¼ a bushel, with wheat for the same month up 2 cents at $4.96 ½ a bushel.

Traders have reported $5 a bushel proving a bit of a barrier for wheat to get through, suggesting it may take some bullish figures in Wednesday's report – which is expected to show a small rise in expectations for wheat production – to get the grain much higher.

Palm slips

In Kuala Lumpur, palm oil lost some of Tuesday's gains, fostered by data showing lower-than-expected Malaysian stocks.

The benchmark October contract on Bursa Malaysia's Derivatives Exchange closed the morning session down 6 ringgit at 2,394 ringgit per tonne.

However, there was some thought of a rebound once current profit-taking is out of the way, with the prospect of the Asian festival season swelling demand just as Malaysian production is showing signs of sagging.


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