Soybeans rediscovered their mojo on Thursday, managing a higher close even as corn fell, so pushing the soybean: corn ratio to new highs.
It was an easier day for commodities anyway, despite a firmer dollar, with the CRB index adding 0.5% ,helped by ideas of economic strength underpinned by well-received manufacturing and service sector surveys from China and Europe this week, and some decent US data, for example on car sales.
But soybeans staged a late revival helped by the latest Midwest weather outlook, with the GFS model turning drier for next week.
"The model is weaker with the cold front September 11 over the central Plains and Midwest," WxRIsk.com said.
"The coverage is 40-50%, with rains of 0.1-0.5 inches, which is drier than the previous run and the run before that."
In the meantime, the GFS is sticking "with the idea of moderate showers and storms over Saturday afternoon into Sunday morning over eastern Iowa, north east Missouri and western Illinois", the weather service said, adding that "the showers are not heavy - 50-60% coverage of 0.1-0.65 inches".
Still, at Country Futures, Darrell Holaday said: "The most bullish aspect of the GFS is that the seven-to-10 day run turned much drier."
At Allendale, Paul Georgy said: "It would seem that more stress for the soybean crop is likely."
That was not to say that that all the news on soybeans was bullish, with much comment on China's sales of 417,448 tonnes of the oilseed at its latest auction.
"They have now sold 1.3m tonnes of soybeans since August 8," US Commodities said, adding that "it is the Chinese selling of soybeans that has helped cap rallies" in Chicago futures.
That implies less need for imports, in which South America is anyway providing growing competition.
"China has been purchasing South American beans over the past couple of days," one broker noted.
Macquarie cautioned on the dim potential for higher prices even as it cut its US soybean yield forecast to 40.9 bushels per acre, well below the 42.6 bushels per acre the US Department of Agriculture has factored in.
Still, with the soymeal market firm, and Chicago's December contract for the feed ingredient closing up 1.6% at $429.40 a short ton, the default move for soybeans was upwards.
The November soybean contract ended up 1.1% at $13.57 ½ a bushel, gaining a technical boost from resisting the temptation to close the gap left in its chart by Tuesday's rise in prices, and by moving back above its 10-day moving average.
'Producers pleasantly surprised'
An extra technical support was the oilseed's ability to slip their tie to corn prices, and lift the ratio of November soybean to December corn to 2.97: 1 by the close, busting well out of the trading range.
Corn itself struggled in part because weather is less important, with the crop being harvested in many areas, and thus far turning out fine, although the main drought-hit regions have yet to be reached.
"Corn harvest is moving north to central Indiana and Illinois and north east Missouri," Allendale's Paul Georgy said.
"Yield reports we are getting are in the mid-200s [bushels per acre] and have producers pleasantly surprised.
"They are able to take advantage of the premiums being paid for immediate delivery at the elevators and processors."
The United Nations Food and Agriculture Organization lifted its forecast for the US corn harvest, and indeed world grain supplies.
Meanwhile, demand ideas are not great.
US ethanol production data did not help by showing output falling 1,000 barrels a day to 819,000 barrels a day last week.
And exports remain a worry, with Brazilian and Ukrainian corn undercutting US supplies.
"The corn and wheat markets run the risk of a very slow fourth quarter export sales volume if things do not change," Country Futures' Darrell Holaday said.
Technically, Chicago's December contract lost kudos by closing the last session below all its major moving averages, and went further below on Thursday, ending down 1.8% at $4.61 a bushel.
With corn lower, wheat was always likely to drop too, especially given its own export concerns, highlighted by no-show on Wednesday of US grain at a tender by Egypt's Gasc authority. (Gasc actually unveiled another tender on Thursday, but after markets closed.)
Mr Holaday said: "The world competition situation continues to haunt these markets. There was no wheat offered to Egypt in their monthly tender from the US because it was so far out of the market."
Furthermore, yields from the spring wheat harvest "are coming in better than expected in the northern US Plains, sending a signal that the yields in Canada could be large".
Benson Quinn Commodities concurred on "very good" yields, but cautioned on quality, saying that "we continue to see wide ranging proteins in the US with the bias being lower than normal".
Contract closing lows
Still, "it seems the Canadian producers have found pockets of better protein," the Minneapolis-based broker added.
Chicago soft red winter wheat for December dropped 0.9% to $6.40 ¼ a bushel, which actually represented a contract closing low, just.
Minneapolis hard red spring wheat for December tumbled 1.5% to $7.11 ¼ a bushel, most definitely a contract closing low.
In Paris, November milling wheat eased 0.1% to E187.50 a tonne, while London feed wheat for November dropped 1.0% to £154.50 a tonne, both lots remaining above contract lows.
Soft commodities were helped to some extent by a recovery of 1.6% in Brazil's real against the dollar, boosting the value in terms of dollar futures of assets of which Brazil is a big player.
December arabica coffee at least managed to hold firm at 116.85 cents a pound in New York, recovering from 115.25 cents a pound earlier, which represented the lowest for a nearest-but-one contract in four years.
Raw sugar for October added 0.8% to 16.51 cents a pound, boosted by a downgrade by Czarnikow in its forecast for the world surplus in 2013-14 by 1.9m tonnes to 2.0m tonnes.
Indeed, the merchant cautioned that the market may be overestimating the world supply surplus, saying low prices have considerably spurred demand.
But both were eclipsed by cocoa, which managed further strong headway, achieving its best two-day gains for a year, on both sides of the Atlantic.
The bean is being boosted by ideas that the 2012-13 deficit may be larger than the 52,000 tonnes the International Cocoa Organization has estimated.
As extra support, swollen short disease, a viral infection, was reported as spreading in Ivory Coast, the top producing country.
And in second-ranked Ghana, regulator Cocobod was revealed to be planning to phase out a fertilizer subsidy, saying prices are not high enough to justify it.
Cocoa for December added 3.0% in London to £1,704 a tonne, the contract's best close in nigh on a year.
In New York, the December contract added 2.8% to $2,567 a tonne, also the contract's highest finish since September last year.