Following Turgid Tuesday, would grain and oilseed markets witness Wake-up Wednesday?

There was certainly a bit more in the way of direction in the market in early deals.

But it was not all upwards, as external markets would suggest, with shares putting in a strong performance in Asia, if opening mixed in Europe.

Tokyo shares soared 2.3% to a 33-month high, boosted by hopes for more monetary stimulus, which weakened the yen, so tilting the playing field in favour of the country's important exporters.

Shanghai shares rose 1.0%, helped by property stocks, after talk that the government is to allow house price rises of up to 10% this year.

The gains followed the rise of Wall Street's S&P500 index to a five-year high in the last session, and futures suggested a firm start on Wednesday too – closing the gap on a record high less than 4% in gains away.

'Small amount of rain'

Many commodities nudged higher too, including London copper, as well as, in the agri space, Chicago soybeans, which added 0.4% to $14.57 a bushel for March delivery, as of 09:45 UK time (03:45 Chicago time).

The oilseed is gaining from factors on both the supply and demand sides of the balance sheet (and a technical prop too), with South American weather forecasts still raising concerns over crops in Argentine and southern Brazil.

(Meanwhile. rains and logistical bottlenecks spark fears for supplies from central and northern Brazil, where harvest has begun.)

"According to most updated weather forecasts, small amount of rain over corn and soybean growing areas next week now seems more likely, capping gains in the two grains," Joyce Liu at Phillip Futures said.

'Crucially important'

Not so fast – the outlook is not all so benign, with an extended dry period potentially to follow.

"The longer-range weekly data shows that after this rain in early February over south east Brazil and Paraguay and northern Argentina, nothing else falls for the rest of the month of February over this area," weather service WxRisk.com said.

"The models lift the heavy rain back up into west central, central and east central Brazil," where it could bring harvest delays.

"If this forecast is correct, these rains for south eastern Brazil become crucially important for February."

China and charts

This is of import also for prices of corn, which is like soybeans in a sensitive development phase in much of South America.

But the situation for soybeans "is expected to remain more bullish than corn because of China's accelerating demand for the commodity", Ms Liu said, flagging talk of the country's imports, the world's biggest, rising to 15m tonnes in the next quarter, from 11m tonnes this quarter.

In fact, Oil World said Chinese imports would hit 12m tonnes in the January-to-March quarter, actually a drop of 2m tonnes, "as very little will be available from South America in this period", before surging to 35.9m tonnes in the April-to-September half, up 4.9m tonnes year on year.

And, technically, March soybeans did achieve some victory in the last session by, at last, managing to exceed and close over their 75-day moving average for the first time since September.

Data later

However, corn in the last session once again faltered at its 75-day moving average - and again on Wednesday too.

While supported by the same South American weather concerns as soybeans, the demand picture looks less resilient, with latest data showing rationing in US exports and ethanol use, and in the livestock sector in terms of a lower-than-expected cattle feedlot population.

More will be known on ethanol later today, when the US releases latest weekly production numbers against a backdrop of mothballed capacity.

A plant in Plainview Texas, with 120m gallons, halted production on Tuesday, with ethanol groups Abengoa and Poet temporarily shutting three plants between them in recent weeks, following Valero's confirmation on Tuesday of shutdowns at three of its 10 sites.

Corn for March stood down 0.1% at $7.27 ¾ a bushel.

Rising crop hopes

And a weak start by fellow grain wheat was another depressant, as attention strays to the better prospects for 2013 harvests for countries other than the US.

The non-reaction of investors in the last session to data showing further deterioration in wheat in Kansas, the top US growing state, appeared to show that investors had factored in that risk.

It was followed up by forecasts from Canadian officials of a 7% hike in domestic wheat seedings for 2013-14, helped by a switch from canola and lentils.

"This is doable depending on what Mother Nature has in store for our friends to the north," Brian Henry at Benson Quinn Commodities, the Minneapolis-based broker, said.

Trade debate

And on Wednesday, Russia, having underpinned wheat markets on Tuesday by talking of a cut to 14m tonnes from 15.5m tonnes in its estimate for shipments in 2012-13, on Wednesday gave bears a feed with a talk of a huge harvest this year.

Russia may harvest about 95m tonnes of grain (mainly wheat) this year, Interfax news agency said, quoting a farm ministry source in Agriculture Ministry, a result which would represent a huge improvement on last year's 70.7m tonnes.

Ideas on wheat demand are mixed, with France-based Agritel talking of demand from importers shifting to North America, saying Canada and the US appear to have won a "big part" of an Algerian order of 500,000-600,000 tonnes of durum wheat.

"France and Italy just won a small part of that tender," Agritel said, citing the impact of a strengthening euro in reducing the competitiveness of eurozone exports.

'Begging for non-traditional business'

However, in the US itself, Benson Quinn's Brian Henry said that "there are some tenders being floated in the global wheat market, but the interest is in locations other the US.

"The market seems to begging for some type of non-traditional business."

Furthermore, there are some remaining jitters over prospects of purchases by Egypt, the top importer, despite official denials of rumours that financial constraints could curb volumes.

Chicago wheat for March fell 0.5% to $7.73 ½ a bushel.

'Awash with supplies'

Among soft commodities, New York cotton for March eased 0.3% to 82.17 cents a pound, undermined by ideas of rising Chinese production this year.

China's Cotton Association said China's harvest, the world's biggest, may rise nearly 2% this year to 7.4m tonnes, with Bloomberg reporting local analysts as saying that the country "is awash with all kinds of local and imported cotton and the demand from textile industry remains anaemic".

However, China was more supportive to sugar.

Talk that shipments of at least 100,000 tonnes of raw sugar are being shipped to the country from Latin America, and with a further 150,000 tonnes likely next month, helped New York's March raw sugar lot add 1.1% to 18.58 cents a pound.

Strong Chinese beet and cane harvests last year had been seen as quelling need for imports.