Corn futures eased despite confirmation of a huge Chinese import purchase, which prompted talk that US officials may have been too gloomy in downgrading expectations for US exports of the grain.
US Department of Agriculture officials said that China had purchased 900,000 tonnes of American corn, with a further 292,000 booked to an "unknown" destination, suspected by many traders to be China too.
China was also believed behind an 110,000-tonne order of soybeans, also put down to "unknown".
The statement followed talk of hefty Chinese purchases of both crops, which on Tuesday helped drive corn futures up the exchange maximum in Chicago
GrainAnalyst trader Matthew Pierce said the figure was "an impressive number the trade was looking for to substantiate the recent rally".
"Corn [prices] should get a boost from the Chinese deal, with more expected in weeks ahead."
US Commodities, saying the export data were "in line with the rumours" which drove prices higher, said further purchases could be in the offing.
"The buying window remains open for China to purchase grain," the broker said, adding that this could increase scrutiny of a USDA downgrade on Wednesday of 50m bushels, to 1.60bn bushels, in its estimate for domestic corn exports.
"With the announcement of the sale to China this morning on corn, analysts will now begin to push exports back higher versus the USDA expectations."
The USDA maintained an estimate for Chinese corn imports in 2011-12 of 2.0m tonnes, meaning half may have been undertaken this week alone.
‘Buy fact, sell rumour’
Nonetheless, corn for December delivery fell 3% to $6.22 a bushel in morning deals in Chicago, a decline blamed in part on "buy the fact, sell the rumour" thinking among investors, before mounting a late revival seen linked to buoyant US cash prices.
"We have seen this before – a strong run-up in prices on speculation of China buying [corn] and then a drop when the orders are actually confirmed," a UK grain trader told Agrimoney.com.
Corn also came under pressure from fellow grain wheat, which also struggled for most of the day after the USDA lifted its estimate for world stocks to a 10-year high of 202.4m tonnes.
Wheat’s decline has returned corn to an unusual premium to wheat, which has locked their price fortunes, given that the two are interchangeable in many uses.
The correlation between prices of Chicago corn and wheat futures reached a record high last month, topping 80%.
Corn for December closed down 0.4% at $6.38 ¼ a bushel in Chicago, where December wheat ended at $6.18 a bushel, down 1.5% on the day.