The hedge funds which took profit on corn futures at the beginning of last week may be wishing they hadn't.
The net short on Chicago corn futures and options tumbled by nearly 40,000 contracts in the week November 12, a hefty number, after the US Department of Agriculture surprised the market by making only a small upgrade to its forecasts for domestic stocks of the grain at the close of 2013-14.
While that appeared justified for a couple of sessions, corn soon began a decline which accelerated on Monday as investors reacted further to the Environmental Protection Agency's announcement late on Friday of a cut to the US ethanol mandate.
It isn't the only piece of price-negative news around for corn, with values also depressed by improved conditions for South American plantings, from the strong US harvest and ideas of waning export competitiveness too.
"US corn is now running a premium to the Black Sea corn," US Commodities said.
However, the EPA reform - in cutting the ethanol blending mandate by about 1.4bn bushels - added to the reasons for hedge funds to jump back in with fresh short positions, and drive corn futures lower still.
"Corn remains under pressure as ample supplies and weak technical structure are complemented by the negative tilt offered by the ethanol mandate shift," Benson Quinn Commodities.
Reasons for gloom
Richard Feltes, at broker RJ O'Brien, noted also forecasts for elevated US corn sowings for next year's harvest as another reason for gloom on prices, saying that "corn stocks are on track to increase in 2013-14 and 2014-15, the US ethanol boom has peaked, corn buyers are sourcing foreign corn.
Furthermore, "charts are deteriorating".
Additionally, "South American weather is near perfect for strong start to 2014 growing season.
"Look for investor capital to continue exiting ag markets."
In fact, not all the news around on corn was negative.
Ideas of decent export demand received support from data showing US shipments of 30.8m bushels last week, up from 17.2m bushels the week before, and more than twice the level in the same week last year.
But it was not enough to prevent Chicago's December contract from tumbling 2.4% to $4.12 a bushel.
That was the lowest close for a spot lot since August 2010.
It is also getting perilously close to a contract low.
The decline weighed on prices of rival grain wheat too, which closed lower for the 13th time in the past 14 sessions in Chicago, if continuing their habit for only small declines.
The December contract dropped 0.4% to $6.42 ¼ a bushel.
India also did little to help prices by revealing that its decision to cut its floor price for exports, by $40 a tonne to $260 a tonne, appeared to be attracting demand, increasing the country's status as a competitor on world markets.
Indian state trading groups received bids for 340,000 tonnes of wheat, at prices as high as $290 a tonne.
"The response was much stronger after the minimum export price was cut," broker CHS Hedging said.
'Demand now slowing'
As an extra downer, grain officials in Egypt, the top wheat importing country, said that stocks were sufficient to last until March 5.
(This was shortly before Egypt, after the close of trading, unveiled a fresh export tender.)
Meanwhile, Canada was revealed to have offered the lowest price to an Iraqi tender for milling wheat, at $345.00 a tonne including freight (on a ciffo basis), compared with $349.29 a tonne for Australian, and $369.44 a tonne for US supplies.
"The Iraq tender will likely be split Canadian and Aussie," Benson Quinn Commodities said.
US Commodities said that demand for US wheat exports "is now slowing", adding that many importers "are shifting to the EU", as highlighted by the last Egyptian tender, last week.
Still, the export picture may not be quite as bleak as some commentators believe, with weekly US shipments, as measured by cargo inspections, coming in at 18.1m bushels.
That was well above the 12.5m bushels the previous week, and the 11.4m bushels in the same week last year, besides beating market expectations of a figure of 10m-14m bushels.
In Paris, French wheat maintained its competitiveness by easing 0.3% to E204.00 a tonne for January delivery, while its London feed wheat equivalent closed down just £0.10 at £164.90 a tonne.
It was left to soybeans to hold up hopes for Chicago bulls, adding 0.7% to $12.87 ½ a bushel for January delivery.
In fact, the proposed changes to the US biofuels mandate appear negative for the complex too, in lowering guaranteed demand for biodiesel, made in the country chiefly from soyoil.
And indeed, soyoil for December fell 0.9% to 40.11 cents a pound.
RJ O'Brien's Mr Feltes said: "Trade sources suggest the EPA announcement could be most negative on the soyoil market, where biodiesel fuel production for 2013-14 could erode to 4.8bn pounds versus the USDA November 8 forecast of 5.6bn pounds and 4.6bn pounds in 2012-13."
'Hefty export commitment'
However, the oilseed got a bit of help from its other processing product, feed ingredient soymeal, which soared 1.3% to $415.80 a short to for December delivery.
Mr Feltes flagged "attractive domestic feed margins and hefty soymeal export commitment" as underpinning prices.
Furthermore, US soybean exports came in strong, again, too, at 87.8m bushels, beating even the 82.6m bushels the previous week, and well above the 69.1m bushels a year before.
Soybeans for January gained 0.5% to $12.87 ½ a bushel, climbing back over the contract's 20-day and 100-day moving averages.
Among soft commodities, cotton fell in New York by 0.6% to 77.71 cents a pound for the best-traded March contract, as Chinese buying for reserves tumbled, ahead of sales from these state inventories.
China bought 269,450 tonnes of cotton last week for state reserves, as part of a project for guaranteeing domestic farmers a set (and high) price, down from 555,920 tonnes the week before, according to the China Cotton Information Centre.
The total bought so far in 2013-14, at 2.16m tonnes, is down 16% year on year.
'Signs of improvement'
However, New York cocoa for March closed up 1.8% a5 $2,780 a tonne, a two year high for a nearest-but-one contract, extending gains fuelled by concerns over a series of seasons of production shortfall ahead.
And robusta coffee for January soared 3.6% to $1,566 a tonne in London, extending a recovery from a three-year low of $1,431 a tonne set on November 7.
In part the move was technical, with Sucden Financial noting early in the day that "London coffee prices have been consolidating around the $1,500-a-tonne area, showing signs of improvement and correction higher".
However, there are also concerns over the impact on the coffee harvest in Vietnam, the top robusta producing country, of heavy rains which have killed more than 30 people, and flooded more than 100,000 homes.