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Morning markets: weather worries keep soy ahead

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Soybeans retained the limelight on a mixed Friday for commodities, as fears for delays to US soybean plantings added to concerns of short supplies.

Oil paused for breath despite data showing record refinery output in China last month adding to the picture of recovering demand. Profit taking was blamed for the decline, which saw New York crude down $0.33 at $72.34 a barrel at 06:15 GMT, with Brent for July off $0.35 at $71.44 a barrel.

That was one negative influence for commodities. A steady dollar was merely neutral.

Corn slips

Against that background, Chicago corn eased 2 cents to $4.39 a bushel for July delivery, with forward contracts showing similar losses.

A close at that level would leave corn 1% or so lower for the week despite a slight tightening by the US in its corn inventory forecasts for next year.

Wheat was a touch lower too, off 0.25 cents at $5.93 cents for Chicago's July contract, with marginally bigger losses in forward lots. Again, that put it on course for a 1% weekly loss.

Planting worry

Soybeans, however, remained in favour – at least for old crop beans - adding 4 cents to $12.71 ¼ a bushel as the prospect of wet weather in the Midwest growing district, which could hinder the last stages of the soybean planting campaign.

That added to supply concerns fuelled earlier in the week when the US cut its forecast for August soybean stocks to the lowest since 1977.

New crop beans proved more vulnerable to the commodities decline, sliding 4.75 cents to $10.85 a bushel for the November delivery.

El Nino threat

Soybeans provided a helping hand to palm oil, which added 10 ringgit to 2,495 ringgit a tonne in the morning session on the Bursa Malaysia Derivatives Exchange.

The threat of El Nino also supported prices, after a JP Morgan note warned the impact of the disruptive weather pattern on production could send prices above 3,000 ringgit a tonne "over a short period".

By Mike Verdin

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