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Morning markets: palm oil defies softness in soy

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Palm oil, heading into a data cloud, dodged the bears who got their teeth into Chicago farm commodities.

Bursa Malaysia's benchmark July palm oil contract added 58 ringgit, or 2.2%, to 2,743 ringgit a tonne in the morning session as investors digested exports data and placed their bets ahead of a stocks report.

Intertek Testing Services said that exports of Malaysian palm oil rose by 1% to 404,000 tonnes in the first 10 days of the month, which was a help.

But the main focus was on a report from the Malaysian Palm Oil Board, released during the lunchtime recess, which showed Malaysia's crude palm oil sticks at 1.29m tonnes, down 5.4% from March and the lowest figure since June 2007.

'Not super-bullish'

Opinion was mixed on whether the fall was sufficient to help palm oil in afternoon trading.

"The number is friendly but not super-bullish so there is a good chance for profit-taking later in the afternoon," a trader in Kuala Lumpur told Reuters, the news agency.

Another trader said: "The market was buying on rumour and now it will sell on fact."

Palm certainly looked unlikely to get much help from external markets, with oil giving up some of Friday's near 3% gains – Brent was $0.52 lower at $57.62 a barrel at 06:30 GMT – and Chicago's farm commodities on the wane.

Soybeans were the worst affected, off 1.6% at $11.15 ¾ a bushel for May, on talk that China's appetite for foreign purchases was getting sated. Last week, a series of rumours of cancelled and delayed orders swept the market.

Forward contracts were also hurt, with August beans down 1.6% at $10.56 a bushel and the November contract off 2.0% at $9.59 ½ a bushel.

Planting progress

Corn was hurt by speculation of a leap in plantings last week ahead of the crop's witching hour. Corn planted after May 15 is reckoned to lose 1 bushel an acre in yield over early-sown crops thanks to its shorter growing time and, if harvesting is delayed, its vulnerability to autumn frosts.

May corn slipped 3 cents to $4.11 a bushel, with September falling the same distance to $4.26 ½ a bushel.

Wheat gave up some of last week's gains too, with Chicago's July contract off 2.25 cents at $5.88 ¾ a bushel and September down 1.75 cents at $6.15 ½ a bushel.

By Mike Verdin

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