Profit-taking was in the air again on Wednesday.

Shares closed down 0.6% in Tokyo and 1.0% in Shanghai, while standing 1.6% lower in Hong Kong in late deals.

In Europe, stocks opened lower too, by 0.4% in London.

"Stabilisation on major developed-market bourses and declines in Chinese equities took some wind from the sails of the recent rally in sentiment," Crédit Agricole said.

'Bids collapsed'

But again agricultural commodity did a reasonable job of deflecting it.

Apart from soybeans, which succumbed a little to the pull of gravity, standing 0.2% down at $14.65 a bushel in Chicago for May delivery, falling back indeed to their 10-day moving average.

The oilseed's strength is being eroded by an apparent dearth of fresh export orders in recent days, which has raised doubts over whether the export delays in South America are still proving as much of an obstacle to buyers, such as China, as they were.

Indeed, broker EHedger noted that on Tuesday, "CIF soybean bids collapsed, and had a large impact on flat price".

'Keen interest in low prices'

OK, there is talk that the lack of orders from China, the top importer, is down to a dearth of available shipping, all tied up in queues in Brazilian ports.

But that hardly tallied with a further fall in soy prices in China itself, on the Dalian futures exchange.

While soybeans themselves fell only by 2 yuan to 4,733 yuan a tonne for soybeans, soymeal dropped 0.6% to 3,343 yuan a tonne, and soyoil 1.8% to 8,042 yuan a tonne, all for September contracts.

The decline in soyoil to a fresh contract low was reflected in prices of rival vegetable oil palm oil too, which dropped 1.7% to 2,370 ringgit a tonne in Kuala Lumpur, taking little interest in a forecast by the US Department of Agriculture overnight that prices "could soon stage a modest rally", given the shift of the Malaysian production cycle towards a seasonal low.

"Many importing countries are developing a keen interest in these low palm oil prices," the USDA added, noting India's record imports in January.

However, imports by China were weak, reflecting a build-up in port inventories following a late-2012 buying spree, ahead of changes in food safety regulations.

'Consolidation phase'

Back in the US, broker Benson Quinn Commodities said that "the soy complex seems to be entering into a consolidation phase, with the job of the market still to ration demand for US soybeans yet to find that price point entices new longs.

"Until market can find that lower price point or fresh bullish input, lower or two-sided trade looks to be par for the course."

There is also some idea that the oilseed faces a period of underperformance against corn, in new crop terms, or risk skewing incentives for US spring sowings unduly towards the oilseed.

"The corn-to-soybean ratio is still correcting from its massive rally this winter when soybeans gained sharply to corn," EHedger said, noting that it closed the last session "right at the 20-day moving spread average".

November soybeans were 0.3% lower at $12.66 a bushel as of 09:10 UK time (04:10 Chicago time), while December corn added 0.1% to $5.58 a bushel, shifting the ratio back another notch to 2.27.

Chart signal

In fact, corn maintained its upward run, setting course for what would be a fifth successive day of gains, still feeling support from the ideas of market tightness encouraged by US Department of Agriculture revisions on Friday to 2012-13 supply estimates.

"The cash market for corn is strong, and there is heavy long corn/short soybean spread trading as traders opine that corn supply is tighter than that of soybeans," Joyce Liu at Singapore-based Phillip Futures said, noting a potentially supportive chart signal too.

"On the daily spot corn chart, corn has been trading in a down trend since late August 2012. The recent bull-run resulted in corn prices now trading above its upper trend channel," she said.

Nonetheless, considering a level of $7.60 a bushel necessary to "confirm a bullish break-out, we prefer to watch if prices retrace back into the trend channel today and tomorrow".

Brazil progress

The spot March contract, on the eve of expiry, actually stood 0.3% higher at $7.43 ¼ a bushel, with the May lot keeping pace, up 0.3% at $7.16 ¼ a bushel.

The Brazilian shipping hiccups are sparing the crop, for now, the pressure from the South American harvest, which for main-crop corn is some 37% complete in Brazil, up two points year on year, according to Safras.

Sowing of the safrinha corn crop (now expected to be bigger than the main crop) has nearly caught up with 2012 rates, reaching 77.5%, compared with 80.2% a year ago.

Wheat vs corn

Corn's strength helped wheat make some ground too, although a modest 0.25 cents to $7.03 ¾ a bushel, extending its discount to its fellow grain.

Indeed, that gap is encouraged ideas of livestock producers turning to wheat instead of corn, with Benson Quinn noting talk of "US feeders cancelling Argentine corn imports in favour of cheaper US soft red winter wheat", the type traded in Chicago.

"Along with better rail rates being posted by multiple rail lines into the south west US for wheat, this has many looking towards the month-end US grain stocks report for better direction on corn/wheat feed usage."

The US Department of Agriculture will in two weeks' time release a much-anticipated quarterly grains stocks report, which will illuminate thinking on the levels of different grains being used in domestic livestock feeding, which unlike other uses such as exports are not covered by weekly data.

Wheat vs wheat

However, the issue of extra wheat feeding is a matter within the wheat complex too, in encouraging use of soft red winter wheat rather than the higher-protein hard red winter wheat, the type traded in Kansas, which is usually reserved for food use.

Richard Feltes at Chicago broker RJ O'Brien noted "more trade chatter about going long May wheat futures in Chicago, and short on May futures in Kansas.

This is "on the basis of stepped-up soft red winter wheat feeding, improving US hard red winter wheat ratings, and a seasonal tendency for Kansas wheat to erode versus Chicago wheat".

Kansas wheat for May, however, outperformed in early deals on Wednesday, adding 0.3% to $7.37 ¾ a bushel.

'Reflection of seasonality'

Among soft commodities, New York raw sugar opened weak, falling 0.6% to 18.70 cents a pound for May delivery, succumbing to more of the negative forces which, at one time, sent it 2% lower in the last session.

The sweetener is being torn between ideas of a strong Brazilian cane harvest coming up, and forecasts that an unusually large amount of this may go to producing ethanol rather than cane at current price levels.

But New York cotton for May added 0.2% to 87.47 cents a pound.

"The complex continues to retain its underlying bullish feel, supported by ongoing talk of strong Chinese cotton purchases and the subsequent drawdown in US inventories," Luke Mathews at Commonwealth Bank of Australia said.

While Chinese cotton imports fell 39%, year on year, last month to less than 380,000 tonnes, "we think the February slowdown is more a reflection of seasonality and New Year festivities rather than a fundamental drop in demand," he said.