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Morning markets: profit taking weakens crop prices

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Farm commodities let go a little ground on Tuesday as investors booked profits racked up during crops' strong run.

A mild recovery in the dollar didn't help. The greenback's fall in recent weeks to year-lows against other major currencies had helped commodities by making them more competitive on export markets.

A weakening oil price set the tone, with New York crude for July down $0.45 at $68.13 a barrel, and Brent slipping $0.30 to $67.67 a barrel.

Fund money

Chicago crops followed, with wheat dropping back 6.75 cents from its eight-month closing high to stand at $6.67 ¾ a bushel at 06:10 GMT.

Corn edged 3.25 cents lower to $4.42 ¾ a bushel, with soybeans down 1.5 cents at $12.17 a bushel.

"It is a little bit of profit-taking after a very strong close," Garry Booth, a trader with MF Global Australia, said.

Investors were reluctant to short the market given the inflows into commodities, which is a big part of their recent rise.

"If we continue to see global equity and other markets move higher, then it will suggest that we are in the middle of a recovery and we will probably see more funds move into commodities," Mr Booth added.

Tokyo's Nikkei share index closed at a fresh eight-month high, continuing a global round of firm performances on equity markets.

Palm continues upwards

Malaysian palm oil, which is traded in ringgit, managed to avoid the fate of the dollar-denominated commodities, although gains were capped by the fall in crude oil.

Bursa Malaysia's benchmark August contract gained 15 ringgit to 2,640 ringgit a tonne in the morning session.

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