Futures in soybeans, wheat and even cocoa represent a better prospect for investors than corn for now given the prospect of the newly-started harvest of the grain pressing on values, Societe Generale said.

The bank named corn among its top commodities for investors to turn underweight on this month, along with live cattle, which "should weaken" as slaughter encouraged by the US drought lowers the value of fattened animals.

For corn, Chicago's "September contract will likely come under pressure as we closer to the September harvest, despite continued downgrades in yield forecasts", SocGen analyst Jeremy Friesen said.

In fact, harvest has already begun many states, reaching 35% completion in Texas and, further north, 7% in Kansas and 1% in Illinois, the second-biggest producing state.

A crop's harvest-time tends to weigh on prices by producing a spike in supplies, lowering competition between buyers.

'Necessary demand rationing'

Also negative for corn prices is that demand from ethanol plants "has retreated somewhat", Mr Friesen said, with US output of the biofuel remaining amongst its lowest levels since records started two years ago.

There is enough scope in exports, and in inventories, "to deal with the necessary demand rationing needed in our view", meaning corn prices "can come down without a change in the US ethanol mandate".

Many livestock producers have demanded that the US cut rules on US ethanol use to lower pressure on corn supplies from biofuel plants, with the Washington-based International Food Policy Research Institute on Monday urging politicians to "halt" ethanol output "to help relieve the pressures on both domestic and global food markets".

'Value play'

However, Societe Generale put wheat among its top picks, given that "prices remain historically low versus corn while there are still wheat specific weather issues in Europe.

"An overweight wheat position reflects a value play against what we see as a peaking grains market," Mr Friesen said.

Soybeans were also rated overweight, given that they "remain the tightest commodity within the grain and oilseeds sector" following a disappointing South American harvest, preceding the US difficulties.

Meanwhile for cocoa, the prospect of deteriorating weather in West Africa, and of violence in top producing country in Ivory Coast, "should be enough to support the cocoa market through August".

A threat to cocoa bulls was from a strengthening dollar, which "presents a particular risk for higher cocoa prices given a strong correlation with broader market data such as the US dollar of late".

'Precariously low stocks'

The price outlooks contrast with those from other commentators, such as broker RJ O'Brien, which said that while "at the end of the day, [the] rationing job ahead for soybeans is more daunting than corn," for now prospects for a weak harvest of the grain were grabbing investors' attention.

"Market action suggests that trade is more concerned about a much-lower-than-expected national corn yield than it is about how tight [soybean] supplies in the US and South America will be resolved late winter next year—especially if South America is on its way to a 30m-35m tonne gain in 2013 soybean production," RJ O'Brien's Richard Feltes said.

On Monday, Morgan Stanley said it was "constructive on corn prices", given that "physical US and global corn inventories remain precariously low".

The bank was "constructive" on soybean prices too, given weak production in the Americas and firmer crush margins, which had returned positive in China from an early summer dip into the red, and were increasingly strong in the US.

"Corn's recent outperformance leaves us less confident that soybeans will gain adequate acreage in South America in the coming season," the bank added.