Barclays Capital forecast a "stronger" performance for grains ahead despite downgrading its forecasts for the swathe of agricultural commodities, and warning in particular over cotton.

The investment bank blamed "lower base prices and a bleaker macro picture" for downgrades to hopes for futures in grains and most soft commodities –with the exception of New York coffee, for which the forecast for average 2012 values was lifted by 12 cents to 196 cents a pound.

"In the current environment, external markets, attitudes towards risk and views on the global economy are likely to stay in the driver's seat," BarCap analyst Sudakshina Unnikrishnan said.

However, the revised estimates still held out prospects for gains in grains, which Ms Unnikrishnan saw as having "the strongest fundamentals within the agricultural complex".

'The winner' 

Chicago corn prices are set to average $6.70 a bushel in the April-to-June period, lifted by the need to secure sowings from US farmers, and rebuild depleted inventories.

"US and global inventories remain low, China has turned into a net importer, US ethanol production continues apace and US yields continue to be revised lower."

The price forecast was well above the $6.09 ¾ a bushel at which Chicago's May corn futures contract traded at on Thursday.

Bouncing beans 

Soybeans, helped by firm demand, will hit $12.60 a bushel in the quarter, compared with the $11.42 a bushel which the May contract is factoring in.

Gains for wheat, set to average $6.60 a bushel in the quarter, will be more muted. Chicago's May lot was trading at $6.32 ¼ a bushel.

Poor prospects 

However, even after last month's correction, cotton prices are still too high, with futures to average 80 cents a pound in the last quarter of 2012, below the 88.02 cents a pound that New York December 2012 futures are priced at.

"The decline in prices is not likely to stimulate any significant pick-up in demand with current macro fears abounding and growth estimates being revised down."

And New York raw sugar prices will drop to an average of 22.0 cents a pound in the first three months of 2012.

"Despite lower Brazilian output, the move to a larger surplus in 2011-12 is bearish for sugar prices, as is India's exportable surplus and strong production prospects in key northern hemisphere producers like the European Union, Russia and Thailand."

The estimates are the latest in a series as banks position for next year, with the likes of Goldman Sachs, Morgan Stanley, Societe Generale and UBS also revealing commodity outlooks in recent days.