There was one big story in financial markets on Thursday - the Federal Reserve's further move to boost the US economy.

But it wasn't the only consideration for agricultural commodity investors.

OK, the further easing in monetary policy - so-called QE3 - involving monthly injections of \$40bn into the US economy each month through purchases of mortgage-backed securities, was viewed as supportive to commodity prices, if only because it fuelled a 0.6% decline in the dollar.

A weaker greenback makes dollar-denominated exports such as commodities more affordable to buyers in other currencies.

Cotton revives

In fact, such a dollar reaction concurs with an idea from Darrell Holaday at Country Futures that "the market is anticipating [the Fed's initiative] as inflationary, rather than growth stimulating".

In theory, inflation should be supportive to commodities, the kind of assets whose values in theory keep pace with broader price rises .

And certainly the report did, with firm US export sales data, help bring prices of cotton, which as an industrial commodity is particularly responsive to economic factors, back to positive territory.

The fibre had looked set for a negative day after strong monsoon rains added to pressure on prices from the US Department of Agriculture's upgrade on Wednesday, in its flagship Wasde crop report, to forecast for world stocks of the fibre.

New York's December contract closed up 0.3% at 73.53 cents a pound.

Riot factor

However, the average commodity, as measured by the CRB index, added a relatively modest 0.6%, well behind shares, which stood 1.5% higher in late deals in New York.

In part, that reflected concerns over the fresh unrest in the Muslim world which might be considered negative for many raw materials if it spills over into a broader demand threat.

Certainly, copper struggled for much of the day.

"The riots in North Africa and portions of the Middle East are causing traders to question exposure," US Commodities said.

Stockpiling

But one raw material tensions might be viewed as price positive for is wheat, with North African and Middle East governments showing last year too a reluctance to let high food prices add to public discontent, and indulging in a bit of stockpiling.

Egypt appears to be going hell for leather, buying a further 235,000 tonnes on Thursday to take its total purchases in the last five weeks to some 1.7m tonnes.

As an extra support to Chicago wheat prices, the tender showed Russian supplies losing their competitiveness as exportable supplies run low, and narrowing to some \$10 their discount to soft red winter wheat.

When Russian supplies run dry, it is the US that, with Canada, the EU and Australia, will be asked to pick up much of the slack.

Prices rise

But Syria also bought 50,000 tonnes of wheat, following Jordan's order for 100,000 tonnes on Wednesday, and purchases by Oman and Qatar this week too.

And conditions for sowings of US winter wheat are hardly ideal, with the hard red winter wheat areas in particular dry and rains proving "light", according to Mike O'Dea at FCStone.

Chicago wheat for December closed up 1.2% at \$9.02 a bushel, rising comfortably back above its 50-day moving average, with Kansas hard red winter wheat for December keeping up, adding 1.2% to \$9.03 ¾ a bushel.

In Europe, Paris wheat added 1.3% to E264.25 a tonne, helped by France getting in on the Egyptian tender too, and indeed with only shipping costs appearing to prevent it winning a larger order than 60,000 tonnes.

Goldman support

Corn gained too, adding 0.6% to \$7.73 ¾ a bushel for December delivery, helped by growing ideas that the Wasde changes to the US balance sheet for the grain, lifting the stocks estimate at the close of 2012-13, were not so negative after all.

Goldman Sachs stuck with ideas that corn prices are on their way to \$9 a bushel, while Strategie Grains cut its forecast for the European Union corn crop well below Wasde forecasts on Wednesday (which were also downgraded) and forecast imports of 8m tonnes. Just when the world has little of the grain to spare.

And US weekly export sales of the grain at least managed to come in in line with expectations for once, if downbeat expectations.

At 215,000 tonnes, they fell within a range of 200,000-400,000 tonnes.

'Potential freeze'

US weekly export sales of soybeans, of 630,000 tonnes or so, were around the middle of the range of market forecasts.

But if that was a neutral factor for prices, there were plenty of positives - and not just from the Wasde revisions which kept Goldman thinking of \$20-a-bushel soybeans and have been perceived as bullish by many other commentators too.

One is the weather, with FCStone's Mike O'Dea noting that a "potential freeze in the northern parts of the Corn Belt can damage late-developing soybeans.

Further north in Canada, wind has been a problem for rival oilseed canola, with the broker noting talk of "significant losses of Canadian canola due to high winds post desiccation and swathing.

"Canola basis is firming up dramatically in Canada as producers are looking at smaller yields due to wind damage and have slowed selling."

Canola itself for November added 0.7% to Can\$646.10 a tonne in Winnipeg.

Weight watchers

And a big potential plus point was talk of the Wasde, even with its lower-than-expected US soybean yield number of 35.3 bushels per acre, overestimating the crop's potential.

While this number factored in lower pod densities in crops, it used average pod weights, an assumption traders questioned.

Darrell Holady said that there was "still a lot of concern about soybean yield as there is more talk about USDA using a pod weight in yesterday's number that is actually above the seven-year average.

"That just seems unlikely given the overall condition of the crop."

Benson Quinn Commodities said that the methodology "is leading many to believe bean yield and production will decline further on lower pod weights" in the October Wasde report.

Actual yields

However, to counter such concerns was simple harvest pressure, with talk of many early-harvested crops beating expectations, whatever pod weight arguments may say.

"Soybean yield reports trickling in thus far mostly better than expected," Richard Feltes at RJ O'Brien said.

Mr Holaday said: "The most bearish fundamental for soybeans is that true harvest pressure is just around the corner."

Soybeans for November closed higher, but by a modest 0.1% at \$17.47 ¼ a bushel.