Analysts voiced faith in agricultural commodity futures proving unscathed by a renewed downturn in the world economy even as they showed signs of losing their relative strength against other risk assets.
Many farm commodities stood firm last week, even as shares tumbled, with the Dow Jones Industrial Average index of major US stocks losing 5.2% and the broader Standard & Poors 500 index shedding 7.2%.
In the UK, the FTSE 100 index of leading stocks tumbled 9.8%, with shares in resource companies such as Glencore International, down 14%, among major losers.
However, in Chicago, corn futures gained 4.1% in Chicago, "as concerns over US corn yields mounted on signs of poor pollination", Morgan Stanley said.
Wheat ended 1% higher, "as values traded up with corn early in the week before declining sharply on the across-the-board liquidation late in the week", with soybeans’ drop for the week limited to 1.7%.
In livestock markets, near-term futures in live cattle and lean hogs showed small gains, while feeder cattle lost 2.4%.
‘Will hold up relatively well’
Commerzbank analysts said: "We appear to have confirmation at present of the theory that agricultural prices do not react as strongly as other commodity sectors to general economic developments."
And Goldman Sachs, which last week upgraded forecasts for Chicago crop futures, remained sanguine on prices, if warning that they were not totally resistant to demand shocks, notably in oil.
"A global downturn and/or negative financial event would likely push crop prices lower, driven by both lower oil prices and a likely decline in US domestic ethanol consumption along with US gasoline demand," the bank said.
"We would, however, expect agricultural prices to outperform the rest of the commodity complex, especially the more cyclically-leveraged energy and industrial metal sectors in such a negative macro environment."
Forecasts for tight supplies, "the more defensive nature of agriculture demand, and the higher leverage of agricultural growth to emerging market income and population growth rather than to developing markets all suggest agricultural prices will likely hold up relatively well in a slowing economic environment".
Nonetheless, crop futures on Monday lost some of their early resilience, even after a European Central Bank statement that it would buy up debt from the troubled eurozone temporarily boosted many markets.
Crop prices as of 16:15 GMT
Chicago wheat (September): $6.58 ½ a bushel, -3.0%
Chicago corn (December): $6.86 a bushel, -2.4%
Chicago soy: $13.11 ½ a bushel, -1.8%
New York sugar (October): 26.98 cents a pound, -2.0%
London wheat: £157.25 a tonne, -1.5%
Paris wheat: E190.25 a tonne, -2.7%
Contracts for November delivery, unless otherwise stated
Chicago’s September wheat contract lost more than 3% at one stage, and December corn more than 2%.
In New York, sugar for October slid nearly 4% to a one-month low of 26.46 cents a pound, while Kuala Lumpur palm oil closed down 1.9% at 2,994 ringgit a tonne, ending below 3,000 ringgit for the first time since October.
London wheat also notched up its lowest price since October, falling 2.0% to £156.50 a tonne.