Russia's drought once again spoke louder than a weakening US economy on crop markets, placing wheat within grasp of its best month for nearly four decades.

Many assets opened Thursday in weak form, including shares, which were in negative ground in Tokyo and Hong Kong, with declines blamed on poor US durable goods data.

New orders in America for long-lasting manufactured products fell by 1% last month, the biggest drop since August, and seen as another sign that the world's biggest economy slowed in the second quarter.

However, crops proved their contrarian mettle, and were maybe even helped by a continuation of the decline in the dollar which the durable goods data did nothing to slow. The greenback has fallen more than 7% from an early June high, making US exports such as crops that bit more affordable.

'No rain forecast' 

The cause of crops' strength continues to be the weather setbacks which have cut crops in Canada, the European Union and, in particular, Russia, where SovEcon analysts on Wednesday warned that export restrictions may be on the cards.

There is no sign of a let-up in Russia's worst drought for 130 years, with "no rain forecast in the outlook there", Mike Mawdsley at broker Market 1 said.

"It looks dry into the first half of August."

While any rain may be too late to give much help to this year's crop (indeed, it could potentially hamper harvesting the remainder of the 70m tonnes or so left), a further moisture shortfall could spread the damage into next year's production by giving a poor-start to autumn sowings, which start in mid-August in Russia.

Export shift

Still, the loss to Russia, the world's third-biggest wheat exporting country in 2009-10, would be a benefit to other shippers.

"It would appear on paper that there will be a shift in wheat exports from the Black Sea region as well as possibly other areas of Europe," Jon Michalscheck at Benson Quinn Commodities said.

"It's possible that various feed grains which have previously been shipped out of those areas may have to be shifted to either the US and or South America as we move into 2011, or possibly sooner."

That's one reason for the continued interest in Chicago wheat, which rose 0.9% to $6.20 ¾ a bushel as of 05:50 GMT (06:50 UK time), for the September contract.

The rise took the grain's jump this month nearly to 34%, which would be its best monthly gain since 1973 if it can hold on for a couple more days.

 Once again, Russia's woes drowned out the results of the Wheat Quality Council's annual US spring wheat tour, which came up with a bumper yield of 46.3 bushels per acre on its second day, above last year's estimate and the five-year average.

Fund buying 

Other crops were helped by wheat's performance, with corn for September adding 0.7% to $3.78 ¾ a bushel, and soybeans up 0.5% at $10.15 ½ a bushel for August and, up 0.5% to $9.82 ¾ a bushel for November.

Corns had the extra support of breaking back above its 100-day moving average in the last session, helped by funds purchasing an estimated 10,000 lots.

Soybeans are getting a lift from soymeal, whose importance as a feed source is being heightened by the weakening supplies of wheat.

Soymeal for August added 0.5% to $303.10 a short ton, with its soyoil peer up 0.1% at 38.89 cents a pound.

Palm jumps 

In fact, soyoil has, in general, been performing better than soymeal of late, a matter which helped rival palm oil too in Kuala Lumpur.

Palm oil for October jumped 1.1% to 2,522 ringgit a tonne in the morning session, getting within an ace of a two-month high.

Lingering concerns over a potential La Nina weather pattern setting in also helped sentiment.