If South American weather was all corn investors had to think about, the grain might have fared pretty well.

The European weather model, if not the GFS, backed off the idea of widespread rains next week for Argentina, where crops are battling with a dry spell expected to continue into early next week.

"The early Thursday morning GFS again continues to show significant showers and thunderstorms over much of central eastern and northern Argentina, as well as eastern Paraguay and south east Brazil for the six-to-10 day outlook," weather service WxRisk.com said.

"However, the European model is significantly drier and pulls all the rain out of central and eastern Argentina in the six-to-10 day," if leaving southern Brazil, where crops also need precipitation, in the line of fire for up to four inches of rainfall.

Another record

But corn investors did have plenty else to factor in.

There was an upgrade by Conab, the Brazil crop bureau, to its estimate for the domestic harvest to 76m tonnes, up from the record 72.7m tonnes in 2012-13, and well above the US Department of Agriculture's guess of 76m tonnes.

The positive point to central Brazilian growers of the current rains is that they will moisten soils ahead of the sowing of the second, safrinha, crop, seeded on fields cleared by the soybean harvest, and which now accounts for roughly half the total domestic harvest of the grain.

The USDA, whose data set world benchmarks and which on Friday revises crop estimates in its monthly Wasde report, "historically will follow the Brazilian estimates", US Commodities said.

(The broker also noted that "Brazil corn exports have now exceeded the US exports in the world market", as Agrimoney.com revealed on Wednesday).

Export disappointment

Furthermore, US weekly corn export sales, once again, fell below most trade expectations, coming in at 160,000 tonnes.

At broker RJ O'Brien, Richard Feltes said: "September-to-February US corn exports are on track to be lowest since 1990, prompting analysts to look for another cut in 2012-13 US corn exports tomorrow," in the Wasde report.

"There are precedents for surges in March-to-August US corn exports, in 2008-09 and 2009-10, but both years had lower corn prices than today."

Then there is the weakening technical appeal of Chicago's March corn contract to factor in, with the lot - in falling 1.4% to $7.12 ¾ a bushel with half an hour of trading to go - comprehensively surrendering its 50-day moving average.

It got most of the way towards its 200-day line – the last of the major moving averages it remains above.

'Struggled more than expected'

"The corn market is the one that has struggled more than expected," Darrell Holaday at Country Futures said.

"We anticipated the market would move up to $7.50-a-bushel area, and it went to $7.46, and we are not surprised that the market has worked lower.

"But we are a little surprised at how easy it has moved down."

That said, it was a difficult day for many risk assets, after Mario Draghi, president of the European Central Bank, warned that the strength of the euro could pose a threat to the central bank's inflation outlook.

The euro tumbled more than 1% against the dollar, which added 0.6% against a basket of currencies, making dollar denominated assets, such as many commodities, less appealing as exports.

The CRB commodities index dropped 0.6%, while amidst the fresh uncertainty shares struggled in Western markets too, closing down more than 1% in London.

'Big number'

It took a special story to resist the selling pressure, which soybeans had, in the South American weather outlook and in bumper US weekly export sales.

The came in at 1.67m tonnes – more than twice as much as some analysts had expected, and largely to China, the country which made that spate of cancellations last month.

"Export sales this morning were solid on soybeans," US Commodities said.

At Country Futures, Darrell Holaday said: "Over 869,000 tonnes of old crop and over 770,000 of new crop were sold last week. Big numbers."

Too big perhaps, given depleted supplies?

"We don't really see how US soybeans will be used to meet all of the old crop obligations," he said, cautioning of a "very high likelihood that there will be cancellations or movement to new crop".

Brazil vs US

OK, it did not all go soybeans' way, with Conab lifting its forecast for Brazil's crop to 83.4m tonnes, from 82.7m tonnes.

That would be enough for exports of at least 36.8m tonnes, Conab said, raising its estimate from 36.4m tonnes last month, and signally eclipsing the 36.6m tonnes that the USDA has down for US shipments in 2012-13.

Brazil's outcome "depends exclusively on logistics, above all on ports and freight price, because international demand, especially from China, remains quite adequate", Conab report said.

Still, Chicago soybeans had enough resilience to stand unchanged at $14.87 ½ a bushel for March delivery.

Export talk

Not so Chicago March wheat, which lost 0.6% to $7.58 ¼ a bushel, a performance which at least allowed it to rebuild further its premium over corn.

The weekly US figure was OK, at 300,000 tonnes, within the range of market expectations.

And "rumours continue that Russia/Brazil could import US soft red winter wheat as import tariffs are removed," US Commodities said.

Agrimoney.com revealed that a shipment of US soft red winter wheat has already been sold to the UK, for the first time in decades.

Mixed moisture

Still, more mixed for prices was talk of some moisture for dry US winter wheat areas.

"The midday GFS is providing good chance of moisture in Nebraska, eastern Kansas, eastern Oklahoma this weekend and early next week," Mr Holaday said.

Still, the "south west hard red winter wheat areas will see minimal moisture from the system", and. the forecast beyond February 12 for the Plains is dry".