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Morning markets: crops tread lower - once more

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Farm commodities remained in a downbeat mood on Wednesday, with crops sliding in both Chicago and Kuala Lumpur in the absence of obvious buying signals.

In external markets, the rise in Asia-Pacific equities slowed down, with the MSCI regional index – excluding Japan – setting a fresh 10-month peak, but only just. Japan's Nikkei index closed up 0.7%.

Oil - a key signal for food commodities given their use in making biofuels – eased on data showing an unexpected rise in US crude inventories. New York light crude for September stood $0.34 lower at $65.27 at 06:30 GMT.

'More competitive'

Corn, a key feedstock for bioethanol plants, took its cue to step once again into negative territory, with ideal US growing conditions continuing to stoke the bearish mood.

However, it did not stray far, shedding 1 cent to $3.10 ½ a bushel for September delivery, in contrast to its performance on Tuesday, when corn slumped nearly 4% at one point to a 2009-low.

"The speculation is that such a surprise fall makes US supplies more competitive in the global market," Toby Hassall, an analyst with Commodity Warrants Australia, told Reuters, the news agency.

"The further the price fall the more attractive US supplies get."

Wheat, however, appeared to still have some work to do to attract buyers, sliding 4.5 cents to $5.30 ¼ a bushel for September delivery.

Soybeans did better, standing 6.5 cents higher at $10.21 a bushel for the August contract, gains echoed across new-crop lots.

Soybean readacross

In Kuala Lumpur, crude palm oil shed 1.5%, hurt by Tuesday's similar slide in Chicago soybeans - a rival in the vegetable oil market - as well as easing crude oil and fears of waning demand.

"Commodity markets are generally mixed and there has not been a real pick up in buying for the festival season in Asia," a trader said.

The trader added: "The possibility of a record soy crop this fall is weakening all the vegetable oil complexes."

Benchmark October palm oil closed the morning session on Bursa Malaysia's derivatives exchange down 32 ringgit at 2,111 ringgit a tonne.

By Mike Verdin

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