Thursday started with one big test for financial markets – Chinese economic data.

In fact, the statistics showed annual growth the world's second largest economy slowing for a seventh successive quarter. It was down from 7.6% the previous quarter, and a figure of 9.3% last year.

But, at 7.4%, the pace in the latest quarter met expectations, and eased fears of a so-called hard landing in Chinese economic growth after a decade growing at an annual pace of 10% or so.

Indeed, coupled with US statistics on Wednesday showing the fastest growth in housing starts in four years, the data were met with some relief by investors, and fostered some rebound on markets.

More cotton headway – for now

Shares, for instance, rose 1.2% in Shanghai and 2.0% in Tokyo, making smaller gains in the likes of Seoul, Singapore and Sydney.

London copper made early progress too, looking for a third day of gains.

And modest buying was the story in agricultural commodity markets too, enabling New York cotton, which in the last session rose the maximum allowed by the exchange, to add a further 1.0% to 78.60 cents a pound, a five-month high.

The fibre is being boosted by a late harvest and, in particular, quality fears which have cut the stocks certified for delivery against New York futures to a decade low.

However, there are some doubts about the longevity of the rebound, given ample cotton inventories elsewhere.

"We don't expect these gains in the Ice futures market to endure past December, nor do we expect a significant impact on global physical prices," Luke Mathews at Commonwealth Bank of Australia said.

"This is primarily because global inventories are still forecast at record high levels this year."

'Making seasonal harvest lows'

Crops gained in Chicago too, supporting ideas that the seasonal low in prices, fostered by harvest, might have been passed.

Harvest time tends to depress prices by bringing a spike in supplies, and so easing pressure on buyers for a while, with the impact this year potentially greater than normal thanks to quality fears, especially in corn, which are dissuading farmers to boost harvest-time sales rather than take a risk with storing crop likely to deteriorate further.

"Many think we are making seasonal harvest lows now, as most of the corn and much of the soybeans have been harvested," Mike Mawdsley at Market 1 said.

Many investors are now looking for signals to cash markets, which are supportive at the moment of firmer prices.

"Basis levels are incredibly strong for corn for this time of year and at this price level," Mr Mawdsley said.

Selling by farmers is widely reported as light.

Data later

Still, if supplies are drying up a bit, is the demand there to drive prices higher?

For corn, ethanol data on Wednesday was mixed, showing production of the corn-based biofuel easing last week, but not disastrously so by 3,000 barrels a day to 800,000 barrels a day.

And more on demand will be imminently revealed, with the US Department of Agriculture later on Thursday to reveal weekly US export sales data.

This is expected to show soybean export sales at 650,000-850,000 tonnes, ahead of the previous week's 524,000 tonnes, and wheat's at 250,000-400,000 tonnes, compared with 229,000 tonnes last time.

For corn, sales of 200,000-300,000 tonnes are forecast, up from the mere 14,200 tonnes the week before.

'Still fighting technical headwinds'

Meanwhile, Friday will bring cattle on feed data, illustrating demand from that sector, with an expectation that placements on feedlots tumbled 14.9% last month.

And then there are chart signals to factor in.

"Price action in the ag sector indicates that the institutional investor has slowed, if not halted the recent pattern of selling, but these markets are still fighting some technical headwinds," Brian Henry at Benson Quinn Commodities said.

"The trade should view two straight days of higher price action as supportive, but it indicates little more than that."

In fact, December corn, in rising 0.8% to $7.51 ½ a bushel as of 09:30 UK time (03:30 Chicago time) broke back up through both 10-day and 20-day moving averages.

Soybeans for November, up 1.2% at $15.27 a bushel, were just about at their 10-day moving average line.

'Inevitable depletion of EU supplies'

Wheat for December was 0.9% higher at $8.63 ¾ a bushel, continuing to gain fresh support from setbacks to Australia's crop, where a new round of downgrades may be in the offing thanks to the drought-tested Western Australia harvest.

"Wheat production in Australia is expected to be reduced by yet another 1m tonnes to about 21m tonnes," Lynette Tan at Phillip Futures said.

And then there is what RJ O'Brien's Richard Feltes termed the "inevitable depletion of European Union supplies that will eventually channel export business to the US", even after a slowish performance so far.

"There are precedents for an increase in the second half of the marketing year, December to May,  in US wheat exports--specifically 2010-11 and 2006-07."