In the end, wheat futures did not pussyfoot around in surrendering their, usual, premium over fellow grain corn.

They held its own for most of the day, helped by ideas that prices near eight-month lows were attracting buyers.

"Bottom line is that wheat has simply got cheap enough for this time, given the strength in corn," Darrell Holaday at Country Futures said, towards the end of the trading day.

And that proved just about true for Chicago's best-traded May contract, which edged 1 cent higher to $7.12 a bushel.

Spreads game

But the March contract succumbed to a late-session capitulation which appeared based on technical factors.

After losing its premium over corn with some 20 minutes of trading to go, the lot dropped from about $7.08 a bushel, and a reasonable gain, to close at $7.04 ¼ a bushel, a decline of 0.2% on the day.

March corn, meanwhile, consolidated to close at $7.09 ½ a bushel, a gain of 0.6%.

Signally, the March corn contract also raised its premium over the May corn contract, which ended up just 0.5 cents at $6.95 ¼ a bushel.

Ethanol boost

There were a few forces at work in supporting corn, one being data  on weekly US ethanol production which bounced back 15,000 barrels a day last week, to 812,000 barrels a day, a seven-week high.

That is reapproaching levels which would meet US Department of Agriculture forecasts for corn use in making the biofuel in 2012-13, and with the summer driving season to come.

And it lends weight to ideas of capacity coming back on stream, after being mothballed last year as corn prices hit record highs.

In another sign of a tighter ethanol market, US stocks fell 121,000 barrels to 19.37m barrels.

'Cash is king'

Furthermore, there was talk from research group Yigu Information Consulting that China's imports of grain, notably corn, might be in for an uptick, on concerns of domestic supplies running low ahead of the autumn harvest.

Commodities guru Dennis Gartman said he would buy the grain, albeit at lower levels that today, at $6.77 a bushel, targeting $7.10-7.25 a bushel.

And, signally, there was the idea of US stocks being incredibly tight for now, a factor reflected in ideas of zero deliveries against the soon-to-expire March contract, meaning cash markets are a better place to sell, and leaving holders of short positions rushing to find coverage.

"With first notice day today, the shorts are now wondering where they are going to get the corn to deliver and they are scrambling to buy back their position," Mr Holaday said.

"The short squeeze that we have talked about throughout February is occurring. Cash ownership is king in the corn market."

'Weather leans negative'

That was enough to overcome a few negatives, such as better farming weather.

"Weather still leans negative [for prices] with beneficial rain/snow across the US Midwest and Plains, another storm across the southern Plains, eastern Midwest and Delta in the 11-to-15 day forecast, a wetter weekend outlook across Argentina, and timely rains headed for Chinese rapeseed areas," Richard Feltes at RJ O'Brien said.

US Commodities said: "Argentina's dry area has shrunk from 50% fewer weeks ago to 25% currently."

Brazil hiccups?

However, weather held some favours for bulls too, with Mr Feltes saying that it was "important to note that Brazilian port weather, after a dry patch this week, will shift wetter next week", meaning potential disruptions to loading cargoes.

(This is especially true of raw sugar, which recovered from a two-year low in New York to close up 0.3% at 17.84 cents a pound. The better-traded May contract added a more modest 0.2% to 18.08 cents a pound.)

And this when ships are already queuing up in Brazil to load up with soybeans from the early harvest.

Indeed, ideas of buyers still opting for higher-priced US supplies, which they can at least get hold of, gained renewed focus when the USDA unveiled the sale of 120,000 US soybeans to China for 2013-14, and a further 120,000 tonnes to "unknown" for 2012-13.

"We all assume it was China. There seems to be no end as they continue to buy some old crop," Country Futures' Mr Holaday said.

Soybeans for March ended up 0.7% at $14.57 ½ a bushel, with the better-traded May lot adding 0.5% to $14.39 ½ a bushel.

Mixed softs

Among soft commodities, sugar was not the only riser, with New York cotton adding 0.3% to 84.38 cents a pound for May delivery, and closing for December up 0.2% at 84.70 cents a pound, the contract's highest finish in nine months.

The fibre is being boosted by ideas of sustained Chinese demand, despite the huge stockpiles the country has run up.

But arabica coffee for May edged 0.05 cents lower to 145.45 cents a pound, providing little comfort for growers, notably in Colombia, concerned about the halving in prices from 2011 highs.