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Morning markets: palm and soy reach fresh peaks

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Palm oil and soybeans began a new week with an old attitude – to make rapid headway amid talk of dwindling stocks and robust demand.

Bullish investors in both crops, which are major feedstocks for vegetable oil processors, fed off each others' optimism.

Palm oil was helped higher by Friday's strong close for soybeans, after strong US export data and further cuts to estimates for Argentina's soybean crop.

July palm oil had surged 147 ringgit, or 6.0%, to 2,595 ringgit a tonne by 07:30 GMT on Bursa Malaysia on decent volume, the highest for a benchmark contract since August.

'Supply driven'

Meanwhile, palm's strong performance helped soybeans to a fresh seven-month high. Chicago soybeans for May delivery were 2.3% higher at $11.26 ¾ a bushel, the highest for a leading contract since September 26.

More distant contracts lagged, but still showed some potential in the new crop. November beans adding 1.8% to $9.89 a bushel, the highest for this contract since January.

"The soya and palm rally is all supply driven," a Kuala Lumper trader told Reuters, the news agency.

"There is very standard demand but less supply of vegoils."

The next key marker on palm oil supply will come next Monday, with data on Malaysian stocks.

Toby Hassall, at Commodity Warrants Australia, said: "It's the same story for soybeans, strong demand for US soy out of China and dwindling stockpiles."

Planting progress

However, it was a different story for corn and wheat, which fell on rumours of strong progress in US plantings, although this has yet to be confirmed by the weekly official data.

May wheat was 7 cents lower at $5.50 ¼ a bushel, with more distant contracts showing smaller losses. September wheat was 3.5 cents down at $5.93 a bushel.

Corn showed a similar pattern, with May down 3.25 cents at $4.03 a bushel, while September stood 1.5 cents lower at $4.21 a bushel.

Stimulus from external markets was limited by holidays in many countries, including Japan and the UK.

Oil added a little on the fat gains made on Friday, with New York crude for June up 10 cents at $53.50 a barrel and Brent 33 cents higher at $53.18 a barrel.

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