So much for caution ahead of key US data. Early nerves gave way to a round of full-scale selling, that left Chicago wheat at its lowest for a month, and helped Paris wheat to its worst close for nearly four years.

A stronger dollar didn't help Chicago prices, making US exports less competitive. Oil didn't help either, by sagging under the weight of rising American crude inventories. That's a factor for crops such as corn which are used in making biofuels.

Still, Vic Lespinasse at GrainAnalyst.com wasn't alone in predicting near the start of trade that prices would end pretty flat, as traders closed books ahead of the US Department of Agriculture's latest crop supply and demand report due on Wednesday.

"Look for continued pressure for now but expect short-covering later in the session," he said at the start of live trading in Chicago.

His closing verdict was so: "The soybean complex staged a last minute recovery to end fractionally mixed while wheat and corn struggled to a lower close, unable to mount any recovery."

'Different landscape' 

Rather than seeing the report as a reason to hold-off, many investors appear to view it as an excuse to place bearish bets. Funds were sellers of an estimated 7,000 corn lots and 2,000 contracts in each of soybeans and wheat with a few minutes of trading to go.

There seems little reason for any bullish revisions in Wednesday's crop report. Certainly not of the scale needed to make a serious dent in robust crop supplies.

"World corn production is expected to be increased in Argentina, Brazil, and South Africa," broker US Commodities said.

"World soybean production is expected to be hiked in Brazil and Argentina.  The landscape is very much different than a year ago when we were experiencing a drought in both Brazil and Argentina."

Soybean surprise? 

The one market where there appears some hope of a bullish surprise is soybeans.

"There is anticipation of another small increase in [US] exports and crush," Darrell Holaday, at Country Futures, said.

That explained soybeans' ability to scrape to a positive close of 1 cent, to $9.41 ½ a bushel, for the March contract, even despite an upgrade from Brazil to its soybean crop estimate.

And this 840,000-tonne increase was from Conab, the country's official crop supply agency, which has a reputation for understatement.

Indeed, Chicago's May soybean lot failed to escape the bearish pull, ending down 0.5 cents at $9.47 ½ a bushel.

Condition improvement

The grains had less success. Corn ended down 1.6% at $3.58 ¾ a bushel for March and the same to $3.69 a bushel for May delivery.

Wheat lost 1.2% to $4.78 ½ a bushel for March and 1.1% to $4.89 ½ a bushel for May. It fared worse, indeed, than Kansas wheat, despite an official report showing that the condition of the crop in Kansas, America's biggest wheat-producing state, had improved significantly over the past week.

Kansas wheat lost 1.0% to $4.91 a bushel for March delivery and 0.9% to $4.97 a bushel for May.

Paris wheat falls 

Still, Kansas investors may think themselves fortunate compared with their peers in Paris, where March wheat dipped E1.00 to E115.75 a tonne, the lowest close for a near-term contract since July 2006.

The slide reflected "continued bearish fundamentals", Glencore's UK grain arm said. Indeed, European farmers are set to grow even more wheat this year, now that barley looks an even worse bet.

However, London wheat was protected by a renewed slide in sterling which lost ground on disappointing house market data, warnings from credit ratings agencies about the UK's sovereign debt predicament, and data showing exports soft despite the weaker pound.

London's March contract closed unchanged at £92.75 a tonne.

Technical factors 

Among softs, sugar also continued its downward run after India's sugar millers association raised its estimate for domestic production by 5% to 16.8m tonnes.

In London, white sugar for May finished down 5.9% at $555.30 a tonne, the lowest close for a spot contract since October.

New York raw sugar for May slumped 5.8% to 20.32 cents a pound, the lowest finish since August.

Technical factors are playing a big part, David Sadler at Sucden Financial Sugar, said, noting that the 40-day and 50-day moving averages "that have recently been converging, this morning crossed to the downside, which may well be why the market had a sudden drop after opening around the unchanged level".