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Morning markets: lame start for corn and wheat

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Once again, palm oil and soybeans stuffed it to wheat and corn, which began the week in poor spirit thanks to a weak oil price and fair planting weather for spring crops.

Chicago's May corn contract slid 4 cents to $3.72 ¼ a bushel, its lowest for more than a month, as new notes of caution on the US economy tripped up oil. New York crude stood 0.72 cents down at $49.61 a barrel at 06:00 GMT following reminders by US president Barack Obama and one of his advisers, Paul Volcker, that economic recovery would be hard won.

Corn's growing use as a feedstuff for bioethanol plants makes it particularly sensitive to the oil price.

Decent planting weather for the US crop sustained the bearish tone.

Chicago wheat fell in sympathy, dropping 5.5 cents to $5.17 ½ a bushel despite a report from National Australia Bank foercasting a drop of 1% in Australia's harvest for the year to 2010.

Early risers

It was a different story for soybeans and palm oil, however, which started this week as they had left off the last.

Chicago's May soybean contract add 3 cents to $10.54 a bushel, helped by continued strong demand from China and a report late last week from Rosario Grains Exchange cutting its estimate of Argentina's drought-affected crop by 11%.

"Strong demand is underpinned by China and that continues to be the primary driver for soybeans," Toby Hassall, an analyst at Commodity Warrants Australia, told Reuters.

Bursa Malaysia's benchmark July palm oil contract was 53 ringgit, or 2.2%, up at 2,488 ringgit a tonne, pulled higher by dwindling stocks and firm exports as well as the strength in soybeans.

Palm oil and soybean oil are to a large part interchangeable, supplying between roughly two-thirds of the world's cooking oil.

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