Will the new month on Wednesday produce a fresh wave of buying?

Investors appeared to think so. At least, the idea of pre-emptive buying was one of the reasons given for wheat's firm start to the week, and corn's rise in Chicago to a 14-month hjigh.

"With the start of a new month once again upon us, we can probably expect to see further new cash flows hitting the market, as was well exampled last month," Jaime Miralles at FC Stone's European desk said.

The beginning of this month, you may remember, saw an acceleration of wheat's spike, albeit to a peak a week or so in.

Dry Cordoba 

Did Agrimoney.com say peak? As it happens, French wheat actually managed to set a fresh two-year high, for a spot contract, on Monday, with the November lot hitting E229.25 a tonne before closing at E227.50 a tonne, up 3.2% on the day.

The grain had plenty of things going for it, beside the near-end-of-month date. Fears are growing for Argentina's crop.

Indeed, Argentina's farm ministry said that in parts of Cordoba, the country's fourth-ranked wheat-producing province, "there has been a marked deterioration in the condition of wheat crops, which have now gone more than two months without enough rain".

Sure, the condition is seen better in Buenos Aires, the top producing province, but the fear is that any shortfall from estimates of a 12m-13m-tonne crop will feed directly through to exports.

And the matter would be not so troubling if Australia, the southern hemisphere's other significant wheat exporter, was also seeing dry weather threaten the crop in its top grain state, Western Australia.

'Cause for optimism' 

Then the latest weather reports from Russia show some relief for drought-stricken farms, but not much, maintaining concerns about prospects for sowings for 2011, whatever Russia deputy economy minister Andrei Klepach might say.

Mr Klepach, while pegging this year's crop at 62m-63m tonnes said that there was cause for optimism over the 2011 crop.

However, he did not elaborate. Nor do junior economy ministers often have huge credibility in crop markets.

(Imagine, dear reader, the deputy economy minister of your own country giving crop pronouncements, and you will get the picture.)

German woes 

What the market is giving large weight to, however, are the rains affecting the northern European harvest.

"Rains have continued to hinder harvest progress, with continuing downgrading of milling wheat estimates, particularly in Germany, with Poland and the UK also a concern," Mr Miralles said in Europe where, indeed, German cash prices for bread-quality wheat indeed set a 28-month high, of E240 a tonne.

"It comes as no surprise that German operators continue to hold off selling, allowing quality premiums to build."

The US view of European grains affairs, as reported by Iowa-based US Commodities, was that the region "could be out of milling quality wheat by January".

Indeed, while Chicago wheat also had enough reason for a rise, it ended up a more modest 1.3% at $6.71 � a bushel for September delivery.

A modestly stronger dollar and the prospect of large deliveries against the September contract, for which first notice is on Tuesday, helped rein in the grain.

More weak yields 

Still, wheat beat corn in Chicago, even though the latter grain gained a bunch of its own supporters too, as US harvest results remain weak.

"The corn harvest in southern Illinois, Kentucky, Missouri, and southern Indiana over the weekend all were 5-25 bushels per acre under produce estimates," US Commodities said

"The heat and lack of moisture is now pushing the crop to maturity at the expense of yield."

It was "now possible" that the US Department of Agriculture would, in its September crop report, cut its estimate for corn yields by 1-3 bushels per acre, the broker said.

Cash in carry 

For now, the USDA is, in a weekly crop progress report due later, expected to drop by 1-2 percentage points its estimate for the condition of US corn rated "good" or "excellent".

Furthermore, Argentina's dry weather could have an impact of corn too, of which the country is the world's second biggest exporter.

Benson Quinn Commodities noted how the La Nina weather phenomenon, was "limiting rains as Argentine wheat comes out of dormancy, and both Brazil and Argentine look to start bean and corn planting shortly".

Chicago corn for September added 1.1% to $4.25 � a bushel, the best for a spot contract since June 2008, with the better traded December contract adding 1.3% to $4.45 � a bushel, and later lots maintaining a premium.

"The market is begging producers to store the corn crop and they will do that given the... carry in the futures contract versus the spot contracts," Darrell Holaday at Country Futures said.

Shipments slip

Soybeans closed lower despite the oilseed also getting caught up in fears for yield declines, with a drop of nearly 60% in US weekly export inspections weighing.

Some traders also talked of "sell soybean, buy corn" spreads as opposed to outright beets on the oilseed.

Chicago soybeans for September dipped 0.4% to $10.18 a bushel, with the November lot down 0.3% at $10.22 � a bushel.

Coffee stirred 

On softs markets, coffee was a standout performer in New York, adding 1.4% to 179.55 cents a pound, gains attributed to fund buying, supported by talk of dry weather affecting plantations in Brazil, the top producer of arabica beans.

However, with London closed for a public holiday, volumes were weak, as they were for raw sugar, which eased 0.15 cents to 19.81 cents a pound for October delivery in the Big Apple.