If any day was likely to see a better start for agricultural commodities, it was Tuesday, the time of reversals according to Chicago lore.

And so it proved, with crops pretty much across the board starting in negative territory, rebounding from the negative territory many were directed to in the last session, on Columbus Day.

But then the default move for financial markets was upward, amid ideas that investors may have been too gloomy ahead of the US third-quarter earnings season, leaving the way open for positive surprises.

Furthermore, a change of leadership in China in a month's time is fostering hopes that this will prompt action to spur the world's second largest economy, and a major consumer of raw materials.

Already, there is talk of reducing obstacles to foreigners investing in mainland Chinese shares, a factor which helped Shanghai stocks add 2.0%, with other Asian shares mixed falling 1.1% in Tokyo for instance buy gaining 0.5% in Sydney, (a market, after all, in which commodity groups hold a large sway).

Palm revival

Among agricultural commodities, gains were particularly strong in palm oil, which soared 2.5% in Kuala Lumpur to 2,427 ringgit a tonne, extending a period of high volatility against a background of fears of rising Malaysian inventories, lifted by soft exports and seasonally high production.

More on palm oil fundamentals will be gained on Wednesday, when the Malaysian Palm Oil Board releases monthly data expected to show domestic palm inventories rising to 2.46m tonnes last month, eclipsing the previous record of 2.26m tonnes set in November 2008.

As a more price-positive factor, Malaysia is considering a cut to its palm oil export taxes, with the government set to discuss the matter on Friday, after last week postponing any decision.

Yield upgrade

Elsewhere in the oilseeds complex, soybeans could not match that gain in Chicago.

But they managed some headway, adding 0.3% to $15.55 a bushel as of 09:20 UK time (03:20 Chicago time) for November delivery amid positioning ahead of Thursday's much-anticipated US Department of Agriculture Wasde crop report.

While the Wasde is expected to hold some negatives for soybean fundamentals, in terms of raising the forecast for the US yield following wide reports of better-than-expected harvest results, investors have already factored in quite some upgrade.

Some analysts believe markets have factored in an upgrade of 3 bushels per acre, which is more than the lift of 1.7 bushels per acre, on top of the current estimate of 35.3 bushels per acre, that analysts are expecting, according to a poll.

Crop overegged?

And even then, analysts have a habit of overestimating the harvest.

"The trade has overestimated USDA October soybean production estimates in five of the last seven years including both of last two stress years in 2010 and 2011," Richard Feltes at broker RJ O'Brien pointed out.

And, as an extra boost to sentiment, the US harvest is getting long in the tooth, easing pressure from that score, although just how advanced we will have to wait until later to discover, with weekly USDA data on crop progress, as well as exports, delayed from Monday by the Columbus Day holiday.

Investors are looking for the soybean harvest to be shown at 60% complete, twice the average pace for this time of year.

Harvest progress

For corn, the harvest is expected to have reached some 70%, a potential support to values as supplies off the combine dwindle.

"I don't get the impression that the producer is selling a large amount of corn at these prices," Brian Henry at Benson Quinn Commodities said.

"After delivering a portion of the corn crop to satisfy their initial commitments, it seems the producer is offering just enough corn to keep basis levels in check and take the commercial/end user focus away from actively owning the futures market.

"However, as the corn harvest is completed in various regions, it is going to get more and more difficult to buy cash corn."

'Sufficiently rationed'

Furthermore, October Wasde reports have a habit of disappointing analysts on estimate for US corn production too, as well as soybeans.

"Be advised that the trade has overestimated October corn production in four of last six years, including 230m-280m bushel over-shots in 2006 and 2010," Mr Feltes said.

"More importantly, the trade overestimated October corn production in each of the last two droughty years."

The problem for corn bulls is that there are ideas that corn users are already curtailing demand to fit a small crop.

"As a whole, the current pace of corn consumption suggests that the smaller supplies are being sufficiently rationed," University of Illinois agribusiness economy Darrel Good said.

Corn for December added a modest 0.2% to $7.43 ½ a bushel.

Russia factor

That was way behind Chicago wheat which, having on Friday approached the bottom of the trading range it has trod for three months, extended its rebound from the floor.

The grain is being supported by "record high wheat and flour prices in Russia's interior", Benson Quinn's Brian Henry said, a factor set to keep that country out of export markets.

And the European Union's ability to contend dropped a touch when France, the bloc's top wheat producer, on Monday lopped 600,000 tonnes off its harvest estimate.

Meanwhile, a drier weather outlook has revived concerns that US drought may extend in some winter wheat areas enough to get the crop off to a mediocre start.

'Awaiting clarification'

Still, it is not all going wheat's way.

Mr Feltes noted that Chicago's December contract, "has not posted a fresh high for over nine weeks despite shrinking former Soviet Union wheat availability, eroding Australian wheat production prospects and lower than expected US September 1 wheat stocks.

"I suspect that wheat is biding time awaiting clarification on size of US corn crop."

The December lot added 0.7% to $8.67 a bushel.

Data later

Among soft commodities, raw sugar revived 0.4% to 21.51 cents a pound in New York for March delivery.

The rise came despite further comments from India's government that it might not after all need imports of the sweetener.

Whether the sweetener can hold gains may depend on data on the cane crush in Brazil's Centre South region due later from industry group Unica.