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Morning markets: food commodities continue sliding

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So-called Turnaround Tuesday segued into Weak Wednesday for farm commodities as investors took to the sidelines to await fresh signals on what the market has in store.

Oil didn't help matters, edging lower after data showing a smaller-than-expected drop in US inventories. New York crude for July stood $0.13 lower at $68.42 a barrel at 06:00 GMT.

Data later from the US Energy Information Administration is expected to provide more clarity on the market direction, traders said.

Palm too pricey?

That provided an uninspiring backdrop for food commodities. In Kuala Lumpur, August palm oil slipped 17 ringgit to 2,581 ringgit a tonne, with concerns of rising production returning to deter bulls.

"The market cannot sustain current levels," one trader told Reuters, the news agency.

"It has to come back below 2,400 ringgit to get some good buyers."

Corn does best

All the big Chicago crops were a touch weaker too, falling further from highs of earlier this week.

Corn, which actually managed a decent late recovery on Tuesday, managed the best showing this morning too, losing 0.5 cents to $4.49 a bushel, amid growing concerns of a supply squeeze.

Wheat shed 2.25 cents to $6.67 ¼, distancing itself further from its eight-month high, while soybeans eased 4 cents to $12.05 a bushel.

Correction 'unlikely'

Nonetheless, there appeared only limited concerns of the slide escalating into a rout.

Doug Whitehead, ANZ's agricultural commodity strategist, said: "We are seeing the rally stall a little bit as there is likely to be a period of profit taking.

"It is unlikely that we will see a big correction. There are some strong fundamentals for ags."

One London trader said that the market may remain quieter now that the next US crop report, due on June 10, was looming nearer.

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