If anyone retains hopes for something bullish coming out of the key US crop report due later, they remained in a minority early on Wednesday.

Trading was cautious in Asian trading hours, with volumes weak, as many investors remained sidelined ahead of the US Department of Agriculture's latest monthly global crop supply and demand report, a much-watched feature of the farm commodities calendar.

But those willing to take the plunge did so to the negative side, amid significant doubts that the report was likely to do anything to improve prices.

'So much crop around'

"I can't see what it could do to perk markets up," a US trader told Agrimoney.com.

"Even if it does cut production estimates, there is so much crop around it's unlikely to make much of a difference."

The report will come out with new output estimates for the 2009-10 soybean crop (expected to see minimal change) and corn harvest, to reflect any changes from a late harvest.

The corn estimate is expected to show a bigger downward revision, although even here some analysts have expressed doubts, pointing to a historical pattern of late-harvested crops turning out larger than expected.

Tariff troubles 

Then to add into the mix were data overnight showing that Chinese imports of soybeans slumped by 28% in February, albeit in a month which witnessed the lunar new year celebrations.

And many analysts are concerned about the impact of a decision by Brazil to raise tariffs on 100 US goods in retaliation over American cotton subsidies.

The levies, to come into force next month, would triple top 30% tariffs on imports of some US wheats.

"The US exported 533,000 tonnes and 753,000 tonnes of wheat to Brazil the past two marketing years, but if the tariff takes effect next month no way will this or next year's exports reach those level," Kevin Kjorsvik, at Benson Quinn Commodities, said.

"This confirms some of the concerns expressed by insiders that the current administration is weak on trade as it allows these issues to carry on. This will only weigh on the market as more issues pop up."

Technical battle 

Chicago wheat for May eased 2.5 cents to $4.87 a bushel at 07:50 GMT. March was corn down 1 cent at $3.57 ¾ a bushel and its May trading made down the same to $3.68 a bushel.

May soybeans were 1.25 cents down at $9.46 ¼ a bushel.

Wednesday may be a key battleground for corn, by the way, according to Market 1's Mike Mawdsley following chart analysis.

"May futures need to get back up and over $3.75 [a bushel]. Failure to do so points back to the $3.40-$3.50 level," he said.

Sliding inventories 

In Kuala Lumpur, however, palm oil perked up on data showing Malaysian stocks of the vegetable oil falling to their lowest for four months.

The decline, of 10.9% month on month, was twice the level that analysts had expected.

The benchmark May contract stood 16 ringgit higher at 2,666 ringgit a tonne.