Agricultural commodity futures got a bit of revenge on Thursday, by rising – even corn, which made an effort at breaking its losing streak, after nine successive sessions of negative closes.

After all that talk of money moving from commodities to equities, shares had a sluggish start, showing small falls on European exchanges, and expected later to open a little weaker in Wall Street too, after a reversal in the positive flow of economic data.

Preliminary data for the fourth quarter of 2012 showed that the French economy shrank by 0.3%., more than economists had expected, with the German economy shrinking more than forecast too, by 0.6%.

This followed Wednesday's US retail data which disappointed some analysts too, in showing growth of 0.1% for January, down from 0.5% for December.

'About done selling'

However, crops managed positive starts in both Chicago and New York, despite dollar strength, fuelled by euro weakness on the economic data, making dollar-denominated assets less competitive.

The greenback added 0.3% against a basket of currencies.

A big factor in ag commodity gains was the idea that a wave of fund liquidation, whether or not spurred by a switch to shares, was waning.

At RJ O'Brien, Richard Feltes said that recoveries in the last session "are suggesting that the row crop liquidation under way since late January – at least for now."

"Technical targets mean little at this point, it's about money flow - and it's been flowing out," Mike Mawdsley at Market 1 said.

"But futures appear to be trying to find a bottom here."

'Maybe funds are about done selling'

In wheat, for instance, did a late recovery in the last session, and the net purchase by funds of an estimated 1,000 Chicago wheat contracts, mean that this tide is at least slowing?

"Maybe funds are about done selling wheat and ready for a little short-covering like we witnessed on Wednesday."

At Benson Quinn Commodities, Brian Henry said: "The little bit of buying being credited to the funds is a sign that the recent pattern of fund selling is coming to an end.

"For the time being, making easy money being short the wheat market may be over."

Indeed, "the speculative seller may shift more of his focus towards covering shorts if a corn market that has been down nine days in a row can find some traction".

'On the side of the bears'

OK, bullish sentiment was hardly rampant, with Mr Henry saying that fund buying in wheat "probably had more to do with the oversold nature of the market" than anything fundamental.

"Daily and weekly charts continue to show momentum on the side of the bears," he said.

Mr Mawdsley said that, in Chicago in general, "rallies are to be sold", echoing not uncommon advice from brokers for producers to sell into price strength.

However, there were some more concrete ideas behind price strength too.

'Weather fears discounted'

One was that short-covering was being encouraged by the prospect of a US long weekend (with markets closed on Monday for President's Day) and with it an extra day to see a change in the South American weather outlook but not be able to trade it.

Indeed, with prices already factoring in significant improvement in Argentine and Brazilian conditions, any real market-moving change in the forecast is likely to be from it turning for the worse, from a farmer's perspective.

"Relatively stable price action on Wednesday suggests that row crop markets have largely discounted mounting evidence that South American February weather conditions will be largely favourable," RJ O'Brien's Mr Feltes said.

'Crop concerns will continue'

But technical factors offered more hope for bears, with markets not only oversold, but appearing, after all, to gain some support from Fibonacci levels discussed on Wednesday.

Luke Mathews at Commonwealth Bank of Australia said that "prices rallied after dropping to technical support" at the 76% Fibonacci support level at $7.22 a bushel.

And investors may have overreacted too to talk of rainfall on the US Plains, where drought has sapped winter wheat seedlings.

"The latest weather reports suggest rainfall in the US Plains may have disappointed expectations, meaning existing crop concerns will continue," Mr Mathews said.'

Rapeseed revival 

Furthermore, in the oilseeds complex, there has been continued comment about an Oil World upgrade to 3.0m tonnes, from 2.75m tonnes, in its forecast for European Union rapeseed imports, accompanied by a warning that supplies are so tight that crushers may have to settle for rationing instead.

"It remains to be seen, however, whether sufficient quantities can be purchased from Australia and the Commonwealth of Independent States countries to reach our estimate," Oil World said, in comments credited with spurring a Can$6.60-a-tonne gain, to Can$628.60 a tonne, in Canadian canola prices in the last session.

Paris rapeseed for May bounced 0.7% to E462.50 a tonne too.

Data later

That said, in Chicago it was the oilseed, soybeans, which continued to find it difficult to establish a firm footing, easing 0.1% to $14.22 a bushel for March delivery as of 09:50 UK time (03:50 Chicago time).

Wheat for March was up 0.6% at $7.40 a bushel, extending a recovery from a seven-month low hit in the last session, while corn for March added 0.5% to $6.99 a bushel (bouncing from its close of the last session exactly on a Fibonacci point).

A positive session for Chicago corn would represent its first in February.

That said, whether it manages to hang on to gains may well depend on US weekly export data due later, expected to show corn sales of 150,000-350,000 tonnes, at least matching the previous week's results, and soybean sales at 700,000-1.10m tonnes, down from 1.67m tonnes last time.

Wheat's sales are pegged at 275,000-400,000 tonnes, compared with 300,800 tonnes the previous week.

"Wheat prices could continue rebound higher given a sound US wheat export sales result tonight," Mr Mathews said.

'Only a matter of time'

In New York, raw sugar for March added 0.2% to 18.26 cents a pound, helped by ideas of growing demand for ethanol in Brazil, encouraged by policy changes, sending more cane to making biofuel rather than the sweetener.

That said, FO Licht, the German-based merchant, said that, with weather boosting prospects for Brazilian cane yields, it is "only a matter of time" before prices fall below 18 cents a pound.

And New York cotton for March added 0.4% to 81.12 cents a pound, if below an earlier high of 81.43 cents a pound, just above to its 20-day moving average, which it had trouble holding.