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Morning markets: sagging dollar refreshes crops

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Commodities awoke in better heart on Thursday and made good early headway, helped by tailwinds from external markets.

Equity inputs were fair. Tokyo's Nikkei share index edged above 10,000 points for the first time in eight months, but could not hang on to the psychologically important marker.

Oil, however, was a favourable influence, making ground on data showing that US crude stocks fell by 4.4m barrels last week, 10 times much as analyst had expected.

US light crude for July delivery added 76 cents higher to $72.09 a barrel with London Brent crude up 71 cents at $71.51.

And the greenback also turned south, a help to dollar-denominated commodities which look cheaper to foreign buyers the more the currency falls. The dollar index, a measure of the greenback's performance against six major currencies, eased 0.5%.

Beans leap again

Among food commodities, wheat was Chicago's biggest winner in electronic trading, in percentage terms, recovering some of the ground lost on Wednesday to stand 1.1% higher at $6.02 ¼ a bushel at 06:15 GMT for the July contract. Forward lots were also higher.

Corn added 0.6% to $4.38 ¼ a bushel, helped by the prospect of tighter stocks ahead, as highlighted by latest US crop supply and demand figures.

Soybeans, meanwhile, set a fresh nine-month high of $12.57 a bushel before losing some ground to $12.55 ½ a bushel, up 0.8% on the day.

Beans' market squeeze was the big pull out from the US crop data, which showed stocks on course to hit their lowest since 1977.

Palm recovers

Their performance helped palm oil to make ground too, overcoming displeasure at reports showing an unexpected rebound in Malaysian stocks and a slide in exports.

"For one thing crude oil is inching higher and higher. People may also feel comfortable to buy, despite disappointing data, because palm has lost about 300 ringgit [from its 2009 high]," a trader said.

Benchmark August contract added 17 ringgit to 2,518 ringgit per tonne in the morning session on Bursa Malaysia's Derivatives Exchange, recovering from an early low of 2,467 ringgit per tonne.

By Mike Verdin

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