Crops started on Friday where they left off the last session, in positive territory, helped by growing fears for tighter balance sheets of all three main crops than had been expected a couple of months ago.

The situation looks least critical in soybeans, where a slowdown in Chinese buying, and some selling by US farmers, has taken some of the sting provoked by a deterioration in the crop in the last US Department of Agriculture weekly report, with weather promising more to come.

"The weather outlook for the next two weeks is warm and dry in the eastern and southern US," broker Benson Quinn Commodities said.

"Crop stress is expected to expand in most areas."

In Singapore, Phillip Futures added: "The market has just enough variety of yield uncertainty to keep prices supported near the $10.00 a bushel level."

Indeed, Chicago's September contract added 2 cents to $10.15 a bushel at 07;10 GMT (08:10 UK time), with the November lot up 1.5 cents at $10.16 a bushel, just maintaining its newly-won premium.

'Shallow kernels'

But greater furore surrounds US corn yields, with results from the early US harvest coming in well below forecasts, according to brokers, and even test plots in Minnesota yielding some 6-8% below last year.

"There is beginning to be mounting concern about the size of this year's corn crop among trade analysts," Benson Quinn's Kevin Kjorsvik said, adding that "dry conditions in the south coupled with wet conditions in Iowa sapped yields".

"Hot mid-summer nights and dry conditions as the crop filled are causing shallow kernels resulting in lower test weights in other areas.

"Consequently, the trade believes that August's USDA production estimate of 165 bushels per acre will be the high water mark for production expectations."

Dry South America 

And this is at a time when demand is being swollen by demand from buyers put off expensive wheat, and while harbingers for South American crops aren't great, thus far.

"So far conditions in Argentina and Brazil remain dry," Mr Kjorsvik said.

"While it remains early the trade is more concerned because South America trends warmer and drier in La Nina years," as this one is turning out to be.

Chicago corn for September added 0.8% to $4.19 � a bushel.

Western Australia relief 

Concerns about dryness in Argentina are a factor in wheat markets too, with the country ranking as the second-biggest South American exporter, and a price competitive one at that.

And in Australia, the southern hemisphere's top shipper, a dearth of rainfall remains an issue in the main grains state of Western Australia, although there is hope of relief.

"Dryness is still persisting in Western Australia grain regions," Luke Mathews, agri commodity strategist at Commonwealth Bank of Australia, said.

"However, a front from Sunday is forecast to bring rain Monday and Tuesday. Every drop that falls is critical.

Resistance level

Still, wheat got support from strengthening corn, its rival in feed markets, and the range of bullish factors revealed on Thursday, from an International Grains Council crop downgrade to burgeoning expectations for Russian grain imports.

Meanwhile, flood-hit Pakistan was reported as ditching plans to sell abroad 2m tonnes of the grain, lowering exportable supplies another notch.

"All these bullish factors might help to lift wheat prices higher," Phillip Futures said, adding that there had been a perception that wheat was oversold, although this had its limits.

"We expect significant resistance at levels of $7 per bushel," the broker added.

Chicago's best-traded December lot was approaching that point, up 1.0%at $6.95 � a bushel, even if the spot September lot had some way to go, up 1.1% at $6.63 � a bushel.

Rising palm 

In Kuala Lumpur, palm oil was higher too, helped by strong soyoil, which added 0.6% to 39.73 cents a pound in Chicago, as its spread with soymeal, down 0.4% to $305.00 a short ton, reversed.

US crush data on Thursday showed soyoil stocks a modest 30,000 pounds or so stronger than expected, at 3.56bn pounds, but soymeal stocks above by a rich 70,000 short tons, at 423,000 short tons.

Soyoil was stronger too on the Dalian exchange in China, where talk of a release of government stocks has weighed on prices for much of the last 10 days.

Godrej International analyst Dorab Mistry added to a more upbeat feel with comments that firm demand could help palm oil trade close to 3,000 ringgit a tonne in the second half of the year.

Kuala Lumpur's benchmark November contract stood 17 ringgit higher at 2,547 ringgit a tonne in early afternoon deals.