One factor in buyers’ favour was India’s return to wheat exports, with the country permitting 2m tonnes of shipments from its huge supplies. (Although it will be interesting to see what price the grain might be offered, given high prices the government has been paying.)
Another was a growing appreciation of the pressure from US harvest, giving supplies their seasonal fillip.
"The reality is that no matter what the size of the corn crop is in the US, this is the time of year when we are on the cusp of a the largest supply of the year," Darrell Holaday at Country Futures said.
"Commercial users are not interested in panicking at these price levels and price a large amount of corn out in front."
‘Flooding the pipeline’
Indeed, whatever continued dry weather might mean as a threat forsoybean yields, it is at least a held to growers getting what crops they have in.
"The lack of moisture across the central part of the US speeds up harvest which adds to the bearish momentum seen in basis," Matthew Pierce at PitGuru said.
"There is nothing to stop corn and soybeans from flooding the pipeline over the next week with no rain expected in major production states for the next 14-17 days."
Benson Quinn Commodities noted that conditions for the wheat harvest are good too.
"Expect small grains harvest to proceed nicely in the northern plains and Canadian prairies as weather forecast remain rather benign with few possibilities of showers and plenty of sunshine," the broker said.
‘Take risk off the table’
As an extra pressure to prices, what rain there will be looks set for the likes of Kansas, Ohio and Oklahoma, which have been pleading for precipitation ahead of winter wheat sowings.
"The weather does look wetter for the southern Plains and Mississippi Delta after September 15," US Commodities said.
Factor in a stronger dollar, after European Central Bank president Jean-Claude Trichet flagged threats to the eurozone economy, soft oil, and weaker Wall Street stocks, and it was barely a surprise that agricultural commodities found the going tough.
"The overall feeling heading into the end of the week is ‘take it [risk] off the table’," Mr Pierce said.
"Risk is a taboo word, so look for pressure to continue as technicals and weakening basis weigh on bulls. Bulls will win in the end but just not today or for the next few sessions."
Still, investors were reluctant to let prices fall too far ahead of the US Department of Agriculture‘s Wasde crop report on Monday which, in potentially revising the US corn yield, is expected to be a particularly influential one.
"With all the talk of a sub-150-bushels-an-acre yield coming from the USDA…" Mr Pierce noted.
Corn closed lower, down 1.9% at $7.34 a bushel for December, but a little above its intraday low.
Ditto for wheat, which ended down 1.8% at $7.34 a bushel in Chicago for December delivery, and down 2.0% at $9.08 ¼ a bushel in Minneapolis, where the favourable spring wheat harvesting conditions stung hardest.
Soybeans nearly scrambled back to positive territory, given some support from dry weather, which is less than ideal for the crop, as well as unwinding of long corn, short soybean spreads. (Funds sold 13,000 corn lots on the day.) Chicago’s November soybean contract lost 0.2% to $14.18 ¼ a bushel.
‘Cash flow problems’
Among soft commodities, prices were broadly firmer again, continuing the hard softs, soft hards theme of Wednesday.
(The exception was cocoa, which tumbled 1.5% to $2,911 a tonne in New York for December delivery, sunk by growing confidence in supplies.)
New York raw sugar added 1.1% to 28.73 cents a pound for October, helped by continued fears for output from Brazil, the top producer and exporter of the sweetener.
"There is now a stark realisation in the market that more investment is needed in Brazil’s sugar sector if it is to continue to support global sugar demand," Abah Ofon at Standard Chartered said.
"We have been told that cash flow problems at several of Brazil’s mills have constrained some necessary upgrades.
"The sugar market must incentivise further output – via plantings and investments – to bolster still-anaemic global inventories."
And cotton managed another upbeat close too, helped by continued concerns for storm damage to US crops, and flooding in Pakistan, besides chart points being crossed which have lured trade buyers into purchases.
"Sure fundamentals may have played a role as fears of damage to the crop condition due to weather, with heavy rains on top of the already drought stricken situation, along with a recent improvement in exports," Jurgens Bauer at PitGuru said.
"Supply concerns are growing. But protection among users may help fuel an already speculative sensitive situation, as Wednesday’s breakout on the upside will attest."
- Evening markets: weather fears boost corn and soybean prices
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- Grains a better bet than soft commodities – BarCap
- India wheat exports verdict remains in balance
- Wheat, corn extend losses as economic worries weigh
- Morning markets: multi-market rebound pulls up crop futures
- Huge opportunities for India in export of cereals
- Barclays: Grains ease on profit-taking after recent strong gains