Anyone want some corn at cut price?
The day brought, besides further thoughts on the much-watched monthly US Department of Agriculture Wasde report released on Thursday, the expiry of September futures contracts in Chicago.
It was not a happy affair for those still holding corn lots, with the contract going off the board at $4.50 a bushel - down 6.1% to its lowest close ever. And it ended at a discount to the best-traded December contract for the first time.
In wheat too, Chicago's expiring September contract underperformed, dropping 2.2% to $6.27 ¾ a bushel, very nearly a close low.
"The expiration of the Sep corn and wheat contracts has been very bearish," Darrell Holaday at Country Futures said.
"The September contracts have absolutely tanked. The longs obviously want nothing to do with taking delivery."
The move in the September contract below December was "not a bullish signal", he added.
And certainly, December corn struggled too, not setting a foot in positive territory all day, and closing down 1.6% at $4.59 a bushel, its lowest close in a month.
And after all, the US harvest continues to beat expectations, albeit from southern areas less affected by summer drought.
"Farmers are surprised by the larger-than-expected yields results from early planted corn," Paul Georgy, president of broker Allendale, said.
And of course, as CHS Hedging noted, corn was "feeling pressure from yesterday's bearish report", with the Wasde lifting US yield, production and end-stocks estimates for 2013-14, when investors had forecast a decline in all three data points.
For wheat, the pressure from the Wasde was not so severe, with the report raising estimates for world stocks, but against a backdrop of ideas, that it was overestimating Argentina, Australian and Brazilian harvests.
However, with fellow grain corn falling, it was hard for wheat to do anything but drop too, especially with moisture reaching many areas which are preparing to plant winter crop, boding well for germination.
"Rains in Colorado have wheat markets getting added pressure," CHS Hedging said.
Wheat for December fell 1.8% to $6.41 ½ a bushel in Chicago, within an ace of a contract closing low.
That pressed on prices in Europe too, offsetting growing talk of the poor quality of Kazakh and Russian crops, and the huge European Union export data this week, of 715,000 tonnes.
Not that this is the end of the battle to get shot of EU wheat, as Gleadell, the UK grain merchant, pointed out.
"The increase in the French crop to 37m tonnes is a growing concern, as more non-EU wheat exports will be required, and at present there seem enough non-EU supplies to meet importers' requirements," Gleadell managing director David Sheppard said.
In the UK itself, "farmers have seen a sharp recovery in the quality of their wheat, and while the extra yield is a benefit, they may struggle to reap much of a premium given the overall quality of the UK crop".
In short, "markets remain in a downward trend", and given forecasts of "plentiful supplies of corn and wheat around the globe… it remains difficult to envisage a sustained or significant rally in wheat prices".
Paris wheat for November closed down 0.6% at E186.00 a tonne, with its London peer shedding 0.8% to £152.50 a tonne.
'Bulls have control'
The prospects for soybeans looked better than for grains, after the surprisingly large downgrade by the USDA in the Wasde to estimates for domestic stocks at the close of 2013-14.
And there is talk of further downgrades to come, given the methodology used in getting to Thursday's number.
"The pod count and pod weight used by the USDA seem to leave some room for adjustments on upcoming reports," Allendale's Paul Georgy said, noting that, technically, if the November contract could get above $14.09 a bushel, "that would suggest a move to the $15.00-a-bushel level".
"Bulls have control of the market at the moment."
CHS Hedging that with bulls getting "a pretty good meal" out of the Wasde, there is "some argument for extending higher prices is on the table. Retesting the recent highs at $14.09 a bushel is very conceivable".
September soybeans expired strong too, up 3.2% at $14.95 a bushel.
'Increasing amounts of rain'
However, while the November soybean contract touched $14.00 a bushel, it quickly fell back when that failed to spark any further buying.
Indeed, weaker grains acted as a depressant, with traders focusing on a November soybean: December corn ratio which is already elevated by historical standards.
And the weather forecast was hardly helpful to bulls either, in indicating rains ahead, largely for Plains states, but also moving into the western Corn Belt, so boding well for a late yield recovery.
The European weather model "shows increasing amounts of rain over the next 4- 5 days for central and eastern Colorado, the north west one-third of Kansas and the south west one-third of Nebraska, with rainfall amounts of 1-3 inches in these areas", WxRisk.com said.
"By Sunday night and Monday, some of the rain is room moving into northern Missouri and the southern third of Iowa.
US vs Brazil
US Commodities pointed out that "the bullish soybean story in the US is countered by the increased production in Brazil", which as Agrimoney.com reported on Thursday is now in 2013-14 forecast to become the top producer of the oilseed for the first time, overtaking the US.
"Big South American exports are expected in February," the broker said.
"Without a drought in South America, world supplies will be ample to surplus. The demand will shift to South America."
Soybeans for November ended down 1.0% at $13.80 ½ a bushel in Chicago, if giving back only a portion of their gains of the last session.
Among soft commodities, it was not such a strong day either, although cocoa for December did add 0.4% to close at $2,601 a tonne in New York, its first finish above $2,600 a tonne for nigh on a year.
Bulls continued to take succour in estimates from Marex Spectron on Thursday of production shortfalls of 161,000 tonnes in 2012-13, and 143,000 tonnes in 2013-14, which starts next month.
And thereafter, "should demand continue to grow at the pace of global GDP growth as currently forecast by the IMF and World Bank, we believe only a rare combination of extremely favourable weather and significantly higher prices will be sufficient to prevent a series of consecutive deficits", the broker said.
However, raw sugar for October dropped 0.5% to 17.09 cents a pound in New York, pressed in part by a weak real, but also by comments from Kingsman, the influential consultancy, which raised doubts over ideas of stronger-than-thought demand, as proposed by Czarnikow last week.
Kingsman cut its forecast for the 2013-14 world surplus, but not by much.
Arabica coffee for December eased 0.5% to 120.00 cents a pound, also dented by the real, and the subject of a less bullish analysis by Marex.