Crops continued their decline on Wednesday, although at a more muted pace than in the last session, as external markets continued to signal red.

The round of sell-offs of riskier assets, on fears of double dip recessions, continued in early deals, sending Tokyo's Nikkei share index closing down 1.7% at a 16-month low. Shanghai stocks were down more than 2% at 07:10 GMT (08:10 UK time).

While crude managed to recover some losses, adding 0.4% to $71.91 a barrel, crops were not so lucky, lacking the stimulus of fresh bullish information around which to base a rally.

"There really has been a lack of new news over the past six-to-10 sessions," Jon Michalscheck at Benson Quinn Commodities said.

"One could go back to the old saying, that you need to feed the bull every day but the bear can hibernate for days at a time."

'Weaken further'

Later, wheat followers may get something latch onto, when Egypt, the world's top wheat buyer, announces the results of its latest tender for the grain.

Traders are also on the look out for changes in the weather in the former Soviet Union, bringing rain to end the drought and improve conditions for sowing the next crop, if coming too late to save the one being harvested.

"Wheat is likely to weaken further," Chung Yang Ker at Phillip Futures in Singapore said.

"The wetter weather is expected to promote planting in former Soviet states that have been hit hard by drought."

Weather questions 

That said, conditions are not all going farmers' way, with Meteorlogix forecasters concluding an outlook for Russia and Ukraine by saying that "scattered showers and much cooler temperatures through the west Ukraine wheat areas will help replenish soil moisture.

"However, much more rain would be needed to end drought conditions. The east Ukraine may miss this rain."

In early deals, Chicago's September lot eased 1.25 cents to $6.73 � a bushel, with the better-traded December lot losing 3 cents to $7.04 � a bushel.

Ethanol margins 

Corn for September was down just 0.5 cents at $4.04 � a bushel, with the December lot unchanged at $4.20 � a bushel.

At least the sell-off of an estimated 20,000 contracts in the last session will have gone some way to resolving the huge overhang of long lots in non-commercial hands, which the latest weekly regulatory data showed nearing a record.

The last session's tumble had also helped make processing the grain profitable for ethanol plants, broker MF Global said.

And, in another reason for some cheer, Mike Mawdsley at broker Market 1 said that technical factors for corn held a positive seam, after the December contract bounced  in the last session off of $4.15 � a bushel, which marked the key 23.9% retracement level from the last high.

"I'm not saying this was all the correction we will see in corn, but a close back over $4.32 a bushel now would look very friendly," he said.

Contracts may also gain some support from 20-day moving averages, placed around $4.02 a bushel for the September lot and $4.17 a bushel for December.

Yield debate 

Soybeans, meanwhile, were mixed. The oilseed received negative signals from China, the world's biggest buyer, where prices were lower on the Dalian exchange, with soyoil values falling further too.

Traders have also been concerned at a dearth of Chinese orders through the US Department of Agriculture's daily reporting system.

However, there is still the prospect that the US crop, the world's biggest, may not set records as convincingly as has been expected.

"Drying is expected to occur across areas of eastern and southern Midwest, Delta and Southeast and may impact yield potential as crop finishes in southern Missouri through southern Ohio," Benson Quinn said.

And this after a surprise 2-point fall in the percentage of the crop ranked "good" or "excellent" in latest USDA data.

Exports slip 

In Kuala Lumpur, palm oil maintained its decline, hitting its lowest for nearly a month, depressed both by a strengthened Malaysian ringgit and continuing concerns over demand for vegetable oils, in particular palm oil, which is trading at a relatively small discount to soyoil.

Intertek Testing Services pegged Malaysia's palm oil shipments down 7.6%, month on month, in the first 25 days of August, with rival cargo surveyor Societe Generale de Surveillance putting the drop at 14.9%.

Palm oil for November delivery stood 14 ringgit lower at 2,496 ringgit a tonne.