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Morning markets: palm oil rises on export data

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Palm oil made the best early headway on Friday, adding more than 2% on strong export data and the robust overnight performance in soybeans, its rival vegetable oil source.

Signals from external markets were set green, with Tokyo shares closing 1.9% higher and oil, just, in positive territory. New York crude for June added $0.14 to $58.76 a barrel by 06:00 GMT.

And palm oil had an extra reason to be cheerful – data from Intertek Testing Services, the cargo surveyor, showing exports up 1.7% at 624,000 in the first 15 days of May.

Bursa Malaysia's benchmark July palm oil contract added 56 ringgit to 2,740 ringgit in the morning session.

Output question

"The exports number is still friendly," a trader at a Kuala Lumpur-based brokerage told Reuters, the news agency.

"Now the important thing is whether or not we will see growth in production this month."

Palm oil is also being helped by suggestions that hot weather will hold back Malaysian oil palm yields.

Stop press: Societe Generale de Surveillance has estimated Malaysian palm oil exports up 8% at 629,000 tonnes in the May 1-15 period, which appears even more friendly than Intertek's for palm oil's afternoon session.

Firm soybeans

Traders may also take heart in a firm performance by Chicago soybeans during Asian trading. Palm oil has been held back by concerns it is becoming too expensive compared with its soy oil rival.

Chicago's July soybeans contract was up 2.5 cents to $11.50 a bushel, with forward contracts also ahead.

The rise reflected the same old concerns, traders said – Argentina's poor crop and bumper Chinese exports.

"The yields in South America are not getting any better and apparently the quality is pretty ordinary," said Paul McKay, a director with Commodity Broking Services in Australia.

He added that the weather which has delayed US corn plantings was "even going to delay some of the soybeans too".

Not that this was helping corn much on Friday, with the July contract slipping 0.5 cents to 4.27 ¾ a bushel and later contracts also subdued.

Investors considered late plantings baked into the price, a trader said.

It was the same story for wheat, off 0.75 cents to $5.92 ½ for July.

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