The corn rally showed its age a bit on Friday, toiling for grip even as weather forecasts signalled that the bad US growing conditions are not over yet.

Sure, not all the weather news was bullish, with rainfall in the western Corn Belt in recent hours proving stronger than had been expected.

"Not a general rain, but still helpful to some areas," Darrell Holaday at Country Futures said of the precipitation.

But the general weather outlook remained yield-negative.

"Heat is clearly coming back into the upper and central Plains and western Corn Belt in in the six-to-10 day and 11-to-15 day outlooks," weather service WxRisk.com said.

Late July weather "may not be as hot as  what we saw  in late June and early July.

"But  mid and upper 90s Fahrenheit, and  dry,   will still be  pretty awful    for late corn and  soybeans."

'Hand-to-mouth attitude'

Nonetheless, Chicago corn for July, having come $0.06 a bushel from setting a record high for a spot contract, fell back to expire at $7.56 a bushel, a loss of 2.0%.

December corn stood in positive territory, up 0.5% at $7.35 ¾ a bushel in late deals, but was well off intraday high.

Mr Holaday, noting that there were "not a lot of interested buyers" said that "everybody goes into a hand-to-mouth attitude when price gets to that level.

"The thought becomes that 'if I am going to have to pay that for corn, I will wait and buy it when I need it'.

"The market will not surge to additional levels, up to $8.00 a bushel, without commercial buying interest."

Chart signal

Indeed, the US Department of Agriculture reported US corn losing out on a sale to Mexico, with Brazil seen in the market as the likely origin of the grain.

And, technically, FCStone's Mike O'Dea warned that the "key reversal still in place from Wednesday in December corn will need to close above $7.48 a bushel today to negate that signal".

US Commodities said that "the market has now moved to the final phase of the bull market", albeit saying that this could yet see prices move a bit higher.

But traders were not so keen to chase the market higher, with a weekend ahead, and the prospect of changes to the weather forecast.

'New concern'

Sure, soybeans managed decent gains, adding 1.5% to $15.51 ¾  a bushel for November delivery.

But then it still has greater potential for yield premium injection, with its vulnerable pod-filling phase yet to come, unlike corn's sensitive pollination phase which is already largely past.

"A new concern will develop as we move to the podding time," US Commodities said, noting that US soybeans "have stopped growing", and that investors expected official data on Monday to show a drop of 3-5% in the proportion of US soybeans in "good" or "excellent" condition.

Furthermore, there are still signs of demand, with the USDA unveiling the sale of 150,000 tonnes of US soybeans to "unknown destination".

'Brazilian crushers out of soybeans'

The demand idea got an extra boost from data showing China's economy grew by 7.6% in the April-to-June quarter, the worst figure since 2009 but still viewed as a relief by some investors, who had feared a negative shock result.

China is the top importer of soybeans, besides cotton, which in New York soared 3.4% to 72.30 cents a pound for December delivery.

And sourcing the oilseed from elsewhere is tricky, with Paraguayan soybeans, unusually, trading at a premium to Chicago futures.

"Brazilian crushers are out of soybeans and need to originate more," FCStone's Mike O'Dea said.

Little wonder that Brazil could be on its way to a record soybean crop of 83.1m tonnes in 2012-13, overtaking the US as the world's top producer, according to Agroconsult.

Black Sea downgrade

For wheat, meanwhile, there was a negative from South American competition already kicking in, with talk that Argentine supplies are $30 a tonne cheaper that US ones.

However, fears continue to grow over the dryness-pressed Black Sea, a keen price competitor –when it has sufficient supplies.

Agritel on Friday cut its estimate for the Russian wheat harvest to 45.9m tonnes, and forecast a sharply lower harvest, down 29% to 70.7m tonnes, in combined Kazakh, Russian and Ukrainian output.

Wheat exports from the three countries will tumble by 45% to 20.2m tonnes.

Russia export ban talk….

Indeed, fears are such that Mr O'Dea warned that "eventually the market will be faced with the prospects of a Russian grain embargo similar to 2008.

"This will be a story for January forward but can have a huge effect on basis and spreads."

In fact, Chicago wheat for September stood 0.5% higher at $8.51 a bushel.

In Europe, Paris wheat for November ended up 1.8% at E258.75 a tonne, while London November feed wheat gained 1.2% to £188.00 a tonne.