Friday presented several good reasons for traders to take profit on wheat, after rises of more than 30% this month.

They didn't take them, in early deals at least, as bulls continued, as it were, to rule the roost.

One reason to sell was the strong result which came from the annual tour of US hard red spring wheat, typically one-quarter of America's total wheat crop, by the Wheat Quality Council.

Despite a weaker first day, the tour ended up with a result of 46.0 bushels per acre, only marginally below last year's bumper estimate of 46.2 bushels per acre.

It was also above the US Department of Agriculture's forecast of a yield of 43.74 bushels per acre, although it will be some comfort to bulls that tour figures often end up above final the USDA number.

Furthermore, the council's durum estimate, while at a record 38.4 bushels per acre, is lower than the 40.0 bushels per acre the USDA is expecting.

US economy concerns

A second reason for investor caution was the soft start on external markets. Tokyo shares slid 1.6%, weakened by some cautious outlook from US technology companies and a gloomy forecast by an American central bank official.

James Bullard, president of the Federal Reserve's St Louis bank, voiced concerns that the US may suffer a Japanese-style economic nightmare of falling prices and investment.

Oil, a leading indicator for crops used as biofuels, eased a touch too.

End of the month 

Then there was the prospect of data later from the Canadian Wheat Board, which is to give its first major update on the Canadian crop since its warning last month of poor spring sowings, a caution which gave the wheat rally its first leg. Will the board maintain its outlook?

And all this before even thinking about the date. The end of the month often brings a wave of short-covering in commodity markets, as funds clear-out positions, with fresh ones often set at month beginnings too. Besides which it is first notice day for August futures, the start of the expiry process.

"Market will be anticipating month-end profit taking, especially from the funds," Kim Rugel at Benson Quinn Commodities said.

"But with broad commodity indices into new recent highs – sellers will be cautious of potential for new month buying next week."

Ukraine export curbs

Indeed, September wheat stood 0.8% higher at $6.32 ¼ a bushel as of 07:20 GMT (08:20 UK time), with the woes of the drought-hit Black Sea exporters still holding huge weight.

Expectations are growing that Russia and its neighbours will import export foreign sales to preserve domestic supplies, favouring supplies from other producing countries including the US, a belief that was given some legs by bumper US weekly export sales data on Thursday.

Furthermore, Ukrainian customs are reported to be allowing shipments of wheat only after it has undergone a battery of tests.

"They do not specify what tests or the requirements to pass unsaid tests," Benson Quinn said.

"One cash trader believed that the new controls will effectively halt exports from the country."

Technical struggle 

Wheat's strength continued to spill over into support for other crops, with corn for September adding 0.7% to $3.82 a bushel, and August soybeans  up 0.7% at $10.33 ½ a bushel.

New crop November soybeans were up 0.6% at $9.94 a bushel amid something of a technical battle, with the contract not having stood above $10 a bushel since January.

The lot was "right up at resistance", Mike Mawdsely at Market 1 said, adding that a close above 10 bucks a bushel "would project $10.30-10.60" a bushel ahead.

Weather fears

In Kuala Lumpur, however, palm oil lost early gains to stand 6 ringgit lower at 2,508 ringgit a tonne.

Yide Futures earlier helped prices higher by saying that uncertain global weather patterns would curb the production potential of edible oils.

Nonetheless, weakening crude prices, and that end of month feel, were blamed for weakening sentiment in afternoon deals.