Shares made a mixed start to Wednesday, showing small gained in Tokyo but a 1.0% loss in Shanghai – a performance which might be taken as a good sign for commodities, if it deters investors from switching assets.

"I don't doubt that there is plenty of truth to ideas that the hedge fund community is focusing capital on equities at the expense of commodities," Brian Henry at US-based grains broker Benson Quinn Commodities said.

"It fits the trend," with much of what money is left in agricultural commodities being biased increasingly towards short positions, which profit when prices fall.

"The fact that more and, in most cases, bigger participants are willing to put more capital at risk on the short side has not gone away," Mr Henry said.

Data later

Still, they weren't in early deals, when grain futures managed gains.

Of course, that might only have been a touch of profit-taking in these short positions, after the tumbles of the last session, when both corn and wheat prices lost some 3% in Chicago.

And certainly, investors had cause to withdraw a touch, given the imminence of key crop data which could prove market moving experiences either way.

Later on Thursday, Conab, Brazil's crop bureau, will release fresh estimates on domestic corn and soybean crops.

And on Friday, the US Department of Agriculture will unveil its monthly Wasde report on world crop supply and demand, a highpoint of the agricultural commodities calendar.

(The USDA is also booked to release weekly US export sales data later today, although there is the potential for these to be delayed, after snows earlier in the week hampered government operations.)

'Highly anticipated'

The betting, however, has been on the Wasde lifting slightly estimates for domestic corn and wheat stocks as of the end of 2012-13, while trimming them for soybeans – one factor in the divergent performance between grains and soybeans this week.

"The report is expected to show a small uptick in old crop US grain inventories because of slower-than-expected offshore demand," Luke Mathews at Commonwealth Bank of Australia said.

"Tonight's US wheat export sales report is therefore highly anticipated."

If it happens, the report is expected to show US wheat export sales at 350,000-550,000 tonnes.

For corn, the forecast is for a figure in the range of 450,000-600,000 tonnes, and for soybeans 900,000-1.25m tonnes.

Technical support

In fact for wheat, Thursday had already bought some positive news for the US, in a purchase by Taiwan of 94,000 tonnes of American supplies.

However, that has to be weighed against the prospect later in the day of India agreeing to permit the export of a stack of extra wheat, potentially 5m tonnes, as it seeks to run down its huge inventories.

"The rising export potential of India for the end of the 2012-13 campaign leads to a re-evaluation of the competitive environment from the US or Europe perspective, especially on Asian destinations," consultancy Agritel said.

At least wheat has some technical support in Chicago, with Mr Mathews noting that "on a first contract basis, prices are now just holding above Fibonacci support at $6.75 a bushel".

The March lot stood at $6.78 a bushel, up 0.3% on the day, with the May contract gaining 0.8% to $6.89 ¼ a bushel.

Corn vs wheat

That was still enough for the May wheat lot to reduce a touch its discount against May corn, which added 0.6% to $6.92 ¾ a bushel.

But then, wheat's cheapness against corn, over which it usually holds a premium, is beginning to attract extra attention, with ethanol group Poet having confirmed that an Indiana plant was seeking soft red winter wheat to use as a feedstock, replacing some corn.

That said, there are doubts as to how significantly wheat can replace corn in US biofuel plants (interestingly, a reverse of the UK situation, where the poor wheat crop has prompted the Ensus wheat ethanol facility to try out corn).

"We do not foresee a wheat-ethanol phenomenon becoming widespread," Joyce Liu at Phillip Futures said.

'Strongest demand'

Chicago's March corn has begun moving in an orbit of its own, moved largely by the need of holders of short positions to cover before expiry next week, at a time of thin supplies of the grain.

The lot rebounded 0.7%, reaching $7.13 a bushel.

Meanwhile, soybeans retained a steadier trajectory, underpinned by the export demand being transferred to US by weak Brazilian logistics, and added 0.2% to $14.88 a bushel for March delivery, and 0.3% to $14.69 ¾ a bushel for May.

"Soybeans have seen the strongest demand among all three grains," Ms Liu said.

Whites vs raws

Among soft commodities, New York raw sugar managed minimal gains, of 0.01 cents to 18.21 cents a pound for May delivery, helped by growing ideas that strength in London white sugar might imply some users being caught short.

White sugar, being already refined, rather than raw sugar is viewed as a quick fix for any gap in supplies.

"The white raw spread, May basis, is quoted around $117 a tonne, a result well above average and up from around $92 a tonne in January," CBA's Luke Mathews said.

London white sugar for May was, however, $0.20 lower at $518.00 a tonne.

Chinese stockpiling?

But New York cotton fell 0.5% to 86.79 cents a pound for May on profit-taking, after closing the last session at a 10-month high.  

Mr Mathews said: "Tonight's US weekly cotton export sales report will be closely scrutinised. Traders are expecting another solid result, of between 125,000-175,000 bales, on the back of further Chinese stockpiling."