If Valentine's Day could not bring love for corn futures, what can?

Chicago's benchmark March lot in the last session notched up its 10^th successive negative close, matching its longest losing streak since 1965.

Indeed, it has yet to record a positive close in February, undermined by a turn for the better in South American weather, which has prompted the removal of some risk premium, besides by the growing focus on the US 2013 crop, and expectations for a huge one.

This focus is to get even sharper next week, when the US Department of Agriculture, at its annual Outlook conference, unveils its first formal estimates for the crop, widely expected to show a record harvest of well over 14bn bushels.

'Sharp plunge may be over'

But on financial markets, of course, a collapse in investor confidence can prove a strong bullish signal – if timed right.

"Bulls are starting to give up hope - probably time to buy," Mike Mawdsley at Iowa-based broker Market 1 said.

And actually there was more than contrarian thinking supporting the case to buy up the grain.

On Thursday "futures did trade an inside day", meaning that its high and low were within the boundaries of the previous session, "and the rate of decent has slowed", Mr Mawdsley said.

"One thing March corn did on Thursday, was to fail to take out the previous day's low for the first time in two weeks.

"Don't get the party hats out yet, but at least the sharp plunge may be over for a tad."

Holiday ahead

Another reason to get hopeful for a positive performance, on Friday at least, is the long weekend ahead in the US, which is on holiday on Monday for President's Day.

The prospect of three days without being able to trade often sparks profit-taking and position closing, maybe especially so when the turn in South American weather forecast is so important for prices.

"A supportive tone heading into the three-day weekend would not surprise," Ben Bradbury at Benson Quinn Commodities said.

Furthermore, not all the newsflow on corn fundamentals, with US ethanol plants continuing to restart as margins recover.

Southwest Georgia Ethanol was the latest to say it was taking an ethanol site out of mothballs, bringing to five the confirmed plant being brought back on line.

'Sell-off overdone'

Indeed, some analysts have been cautioning that the drop in corn prices is not justified fundamentally, including Standard Chartered's Abah Ofon who warned on Friday that the sell-off had been "overdone".

"Weather risks remain, and a repeat of last year's US drought this summer could reverse the current bearish price direction, "he said.

While cutting forecasts for corn futures, to $6.80 a bushel in the last two quarters of 2013, "we remain more bullish than the futures curve, particularly for corn for the second half of the year.

"Any further price declines would present a buying opportunity."

Price gains

In fact, unusually, the March contract did not present any price declines on Friday, at least as of 09:40 UK time (03:40 Chicago time), when it stood 0.9% higher at $7.00 ¾ a bushel.

Its low for the day matched its close of the last session.

And that recovery allowed other crops to make a brighter start too, including fellow grain wheat which added 0.9% to $7.38 ¼ a bushel.

There is some feeling that wheat has been restrained not just by the direct effect of corn's decline, but by an indirect force of investors hedging long corn bets with wheat shorts, so hastening wheat's decline.

'High profile trades remain elusive'

Furthermore, US wheat exports have perked up, hitting 706,000 tonnes last week, the best result bar one in seven months.

OK, not all observers were impressed, with Benson Quinn Commodities saying that "the prospect of reaching the US Department of Agriculture export estimate for 2012-13 are dim", even while acknowledging that the latest data were ahead of the weekly pace of 550,000 tonnes needed to hit that goal.

"The demand for US wheat has gotten better, but high profile trades remain elusive as global traders continue to source supplies from other originations," the broker said.

Still, with Australian wheat exports hardly priced to go, raising doubts over the country's official shipment estimate, might the US gain from that score?

In Australia itself, Commonwealth Bank of Australia analyst Luke Mathews said that "the improvement in export sales will encourage the bulls in the wheat market", also flagging the dispute over the size of China's wheat harvest, as highlighted by Agrimoney.com earlier in the week.

'Further softness likely'

The laggard among the major Chicago crops was soybeans which, besides facing reviving hopes for South American crops, saw disappointing weekly US export sales numbers.

Indeed, for 2012-13, the number was a negative 109,200 tonnes, as buyers cancelled orders, largely either in favour of South American supplies, or delaying purchases until later in the year, when the futures curve shows far cheaper prices.

"Further softness in US soybean export sales is likely over the coming weeks as importers switch purchase to South American origin," Mr Mathews said.

Earlier in the week, USDA analyst Mark Ash cautioned that "it appears that export demand for US soybeans may be tapering off sooner and faster than domestic demand.

"Supporting that conclusion is a steady narrowing of the cash price spread between Gulf ports and inland processors in January."

Chicago soybeans for March were 0.1% higher at $14.19 ¼ a bushel.

Big exports

US weekly export sales were better for cotton, reaching 357,000 running bales, three times the figure of the previous week, and encouragingly for bulls, led by purchases by China.

There have been concerns that China's huge existing inventories might reduce its appetite for US fibre, but the relative cheapness of foreign supplies is stoking the appetite for imports.

Still, investors displayed a little "buy the rumour, sell the fact" thinking, letting New York March cotton fall 0.4% to 80.71 cents a pound.

Rebound from two-year low

New York raw sugar, meanwhile, recovered from its close of 17.94 cents a pound in the last session, for March delivery, the lowest finish for a spot contract since August 2010.

"In that year, the sugar market dropped to a low 13 cents, a reminder to the current market that much lower prices are still possible," Mr Mathews said, flagging the expectations of a large Brazilian crop, which have been highlighted by Macquarie.

Still, with some forecasters believing sugar prices are so low that cane will increasingly be used to make ethanol instead, the contract rebounded 0.8% to 18.08 cents a pound.